Hostname: page-component-78c5997874-t5tsf Total loading time: 0 Render date: 2024-11-17T18:03:34.720Z Has data issue: false hasContentIssue false
  • English
  • Français

Up and Down the Generational Income Ladder in Britain: Past Changes and Future Prospects

Published online by Cambridge University Press:  26 March 2020

Jo Blanden  and
Stephen Machin
Jo Blanden*
Affiliation:
Department of Economics, University College London and Centre for Economic Performance, London School of Economics
Stephen Machin*
Affiliation:
Department of Economics, University College London and Centre for Economic Performance, London School of Economics
*
e-mail [email protected]
e-mail [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This article seeks evidence on trends in intergenerational income for cohorts born after 1970. As many of these cohorts have not yet joined the labour market, we must look at relationships between intermediate outcomes (degree attainment, test scores and non-cognitive abilities) and parental income to forecast forward from these to estimates of intergenerational earnings correlations. We find no evidence that the relationship between these intermediate outcomes and parental income have changed for more recent cohorts. Evidence from the earlier 1958 and 1970 cohorts shows that as mobility declined in the past the relationship between intermediate outcomes and parental income strengthened. We therefore conclude that, under realistic assumptions and in the absence of any significant unanticipated changes, the decline in intergenerational mobility that occurred between 1958 and 1970 birth cohorts is unlikely to continue for cohorts born from 1970 to 2000. Mobility is therefore likely to remain at or near the relatively low level observed for the 1970 birth cohort.

Keywords

intergenerational mobilitychildrenJ62J13
Type
Articles
Information
National Institute Economic Review , Volume 205 , July 2008 , pp. 101 - 116
Copyright
Copyright © 2008 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

∗

This project was generously supported by the Sutton Trust. We would also like to thank Richard Murphy, Elizabeth Jones, Kirstine Hansen and Rachel Rosenberg for help with the data.

References

Altonji, J., Bharaduraj, P. and Lange, F. (2008), ‘Changes in the characteristics of American youth: implications for adult outcomes’, NBER Working Paper No. 13883.CrossRefGoogle Scholar
Blanden, J. (2008), ‘Intergenerational income mobility in a comparative perspective’, in Dolton, P., Asplund, R. and Barth, E., Education and Inequality Across Europe, Edward Edgar (forthcoming).Google Scholar
Blanden, J., Goodman, A., Gregg, P. and Machin, S. (2004), ‘Changes in intergenerational income mobility in Britain’, in Corak, M. (ed.), Generational Income Mobility in North America and Europe, Cambridge, MA, Cambridge University Press.Google Scholar
Blanden, J., Gregg, P. and Macmillan, L. (2007), ‘Accounting for intergenerational income persistence: noncognitive skills, ability and education’, Economic Journal, 117, C43–C60.CrossRefGoogle Scholar
Blanden, J. and Machin, S. (2004), ‘Inequality in the expansion of higher education’, Scottish Journal of Political Economy Special Issue on Education, 51, pp. 230–49.Google Scholar
Carneiro, P. and Heckman, J. (2003), ‘Human capital policy’, in Heckman, J. and Krueger, A. (eds), Inequality in America: What Role for Human Capital Policies, Cambridge, MA, MIT Press.Google Scholar
DiNardo, J., Fortin, N. and Lemieux, T. (1996), ‘Labour market institutions and the distributions of wages, 1973-1992: a semiparametric approach’, Econometrica, 64, pp. 1001–44.CrossRefGoogle Scholar
Ermisch, J. and Nicoletti, C. (2007), ‘Intergenerational earnings mobility: changes across cohorts in Britain’, B.E. Journal of Economic Analysis and Policy, 7, 2 (Contributions) Article 9.Google Scholar
Feinstein, L. (2003), ‘Inequality in the early cognitive development of British children in the 1970 cohort’, Economica, 70, pp. 73- 98.CrossRefGoogle Scholar
Haider, S. and Solon, G. (2006), ‘Lifecycle variation in the association between current and lifetime earnings’, American Economic Review, 96, pp. 1308–20.CrossRefGoogle Scholar
Heckman, J., Stixrud, J. and Urzua, S. (2006), ‘The effects of cognitive and noncognitive abilities on labour market outcomes and social behaviour’, Journal of Labour Economics, 24, pp. 411–82.CrossRefGoogle Scholar
Mazumder, B. (2001), ‘Earnings mobility in the US: a new look at intergenerational mobility’, Federal Reserve Bank of Chicago Working Paper 2001-18.Google Scholar
-(2005), ‘Fortunate sons: new estimates of intergenerational mobility in the United States using social security earnings data’, The Review of Economics and Statistics, 87, pp. 235–55,Google Scholar
Office for National Statistics (2004), Birth Statistics available at http://www.statistics.gov.uk/downloads/theme_population/FM1_33/FM1_33.pdf.Google Scholar
O'Leary, N. and Sloane, P. (2005), ‘The changing wage return to an undergraduate education’, IZA Discussion Paper No. 1549.Google Scholar
Rutter, M., Tizard, J. and Whitmore, K. (1970), Education, Health and Behaviour, London, Longman.Google Scholar
Solon, G. (1989), ‘Biases in the estimation of intergenerational earnings correlations’, Review of Economics and Statistics, 71, pp. 172–74.Google Scholar
-(1992), ‘Intergenerational income mobility in the United States’, American Economic Review, 82, pp. 383–408.Google Scholar
Zimmerman, D. (1992), ‘Regression toward mediocrity in economic stature’, American Economic Review, 82, pp. 409–29.Google Scholar