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Intergenerational Income Mobility in the UK:New evidence using the BHPS and Understanding Society

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  • Bertha Rohenkohl

    (Department of Economics, University of Sheffield)

Abstract

Using a new dataset combining the British Household Panel Survey and Understanding Society, I estimate the intergenerational income elasticity in the UK for individuals born between 1973 and 1991. Employing the traditional OLS approach as well as an alternative two-stage residual method that better controls for life-cycle effects, my results indicate that the intergenerational income elasticity is approximately 0.25. This means that around one quarter of every additional 1% of income advantage enjoyed by parents is passed on to their children. I also estimate income rank coefficients, which are a measure of positional mobility in the income distribution and these results corroborate the analysis of elasticities. These main results are largely robust to changes in the specifications of the model, sample restrictions and to the use of different measures of income. I also obtain regional estimates of mobility, and find large differences between the North and South of England

Suggested Citation

  • Bertha Rohenkohl, 2019. "Intergenerational Income Mobility in the UK:New evidence using the BHPS and Understanding Society," Working Papers 2019017, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2019017
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    File URL: http://www.sheffield.ac.uk/economics/research/serps/articles/2019_017
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    Cited by:

    1. Paul Fisher & Omar Hussein, 2023. "Understanding Society: the income data," Fiscal Studies, John Wiley & Sons, vol. 44(4), pages 377-397, December.
    2. Huang, Xiao & Huang, Shoujun & Shui, Ailun, 2021. "Government spending and intergenerational income mobility: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 387-414.

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    More about this item

    Keywords

    intergenerational mobility; income dynamics; social mobility;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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