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Income inequality, intergenerational mobility and the Great Gatsby Curve: is education the key?

Author

Listed:
  • John Jerrim

    (Department of Quantitative Social Science, Institute of Education, University of London)

  • Lindsey Macmillan

    (Department of Quantitative Social Science, Institute of Education, University of London)

Abstract

It is widely believed that countries with greater levels of income inequality also have lower levels of intergenerational mobility. This relationship, known as the Great Gatsby Curve (GGC), has been prominently cited by high-ranking public policy makers, best-selling authors and Nobel Prize winning academics. Yet relatively little cross-national work has empirically examined the mechanisms thought to underpin the GGC – particularly with regards to the role of educational attainment. This paper uses the cross-nationally comparable Programme for International Assessment of Adult Competencies (PIAAC) dataset to shed new light on this issue. We find that income inequality is associated with several key components of the intergenerational transmission process – including access to higher education, the financial returns to education, and the direct effect of parental education upon labour market earnings. Thus, consistent with theoretical models, we find that educational attainment is an important driver of the relationship between intergenerational mobility and income inequality. We hence conclude that unequal access to financial resources plays a central role in the intergenerational transmission of advantage.

Suggested Citation

  • John Jerrim & Lindsey Macmillan, 2014. "Income inequality, intergenerational mobility and the Great Gatsby Curve: is education the key?," DoQSS Working Papers 14-18, Quantitative Social Science - UCL Social Research Institute, University College London.
    • Handle: RePEc:qss:dqsswp:1418
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    File URL: https://repec.ucl.ac.uk/REPEc/pdf/qsswp1418.pdf
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    References listed on IDEAS

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    12. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
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    1. Income inequality, intergenerational mobility and the Great Gatsby Curve: is education the key?
      by maximorossi in NEP-LTV blog on 2014-11-25 17:22:53

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    Cited by:

    1. Paul Gregg & Lindsey Macmillan & Claudia Vittori, 2015. "Nonlinear Estimation of Lifetime Intergenerational Economic Mobility and the Role of Education," DoQSS Working Papers 15-03, Quantitative Social Science - UCL Social Research Institute, University College London.
    2. Marco Paccagnella, 2015. "Skills and Wage Inequality: Evidence from PIAAC," OECD Education Working Papers 114, OECD Publishing.

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    More about this item

    Keywords

    Income inequality; intergenerational mobility; Great Gatsby Curve; PIAAC.;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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