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

(2008) - Jo Blanden, Stephen Machin

Journal: National Institute Economic Review
Link:: https://www.cambridge.org/core/product/identifier/S0027950100013235/type/journal_article
DOI:: 10.1177/0027950108096594
Links::
Tags:: #paper #NCDS #Income #Mobility
Cite Key:: [@blandenGenerationalIncomeLadder2008]

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 noncognitive 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, the decline in intergenerational mobility that occurred between the 1958 and 1970 is unlikely to continue for cohorts born from 1985 to 2000, and mobility is likely to remain at the low level observed for the 1970 cohort.

Notes

“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, the decline in intergenerational mobility that occurred between the 1958 and 1970 is unlikely to continue for cohorts born from 1985 to 2000, and mobility is likely to remain at the low level observed for the 1970 cohort.” (Blanden and Machin, 2008)