@garcia-penalosaCanWorkersStill2022

(2022) - Cecilia García-Peñalosa, Fabien Petit, Tanguy van Ypersele

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Tags:: #paper #NCDS #LabourMarket #Mobility #Income #SocialClass
Cite Key:: [@garcia-penalosaCanWorkersStill2022]

Abstract

The increase in employment polarization observed in several high-income economies has coincided with a reduction in inter-generational mobility. This paper argues that the disappearance of middling jobs can drive changes in mobility, notably by removing a stepping-stone towards high-paying occupations for those from less well-off family backgrounds. Using data for two British cohorts we examine how the occupational outcomes of children depend on both initial occupations and occupational upgrading during their careers. We find that transitions across occupations are key for mobility and that the effect of parental income on those transitions has become stronger over time. Moreover, the impact of parental income increased the most in the regions where the share of middling employment fell the most, suggesting that greater employment polarization may be one of the factors behind the observed decline in mobility.

Notes

“This paper argues that the disappearance of middling jobs can drive changes in mobility, notably by removing a stepping-stone towards high-paying occupations for those from less well-off family backgrounds.” (García-Peñalosa et al., 2022)

“We find that transitions across occupations are key for mobility and that the effect of parental income on those transitions has become stronger over time.” (García-Peñalosa et al., 2022) Has polarisation of occupational prestige led to difficulties in mobility rates?

“UK data we employ indicate that about 30% of those starting in middling occupations and 40% of those starting in low-paying occupations experience upwards occupational mobility between their mid-20s and their early-40s.” (García-Peñalosa et al., 2022, p. 1)

“Those born in 1958 entered the labour market when middling jobs were plentiful, while those born in 1970 faced greater employment polarization.” (García-Peñalosa et al., 2022, p. 3)

“Notably, around 23% and 30%, respectively, of those initially in low-paying and middling occupations are in high-paying occupations when they are 42.” (García-Peñalosa et al., 2022, p. 3)

“The task approach introduced by Autor et al. (2003) implies that biased technological change results in both the polarization of employment and a change in wages, and much work has been devoted to trying to understand to what extent polarization has driven observed increases in earnings inequality” (García-Peñalosa et al., 2022, p. 5)

“We consider three types of jobs 𝑗 = {1, 2, 3}, which can be interpreted, respectively, as lowpaying, middling and high-paying jobs. Parents transfer human capital to their children and the latter’s productivity, and hence allocation to jobs, is determined both by transmitted human capital and innate (and initially unobservable) ability.” (García-Peñalosa et al., 2022, p. 6)

“We suppose that there are two types of parental background, which we denote low-income (𝐿) and high-income (𝐻).” (García-Peñalosa et al., 2022, p. 7)

“conditional on parental background, high-ability individuals are always more productive than those with low-ability ones irrespective of the first-period occupation” (García-Peñalosa et al., 2022, p. 8)

“In order to adjust both for inflation, aggregate income growth and changes in the dispersion of income, parental income is standardized, so that for both cohorts it has mean zero and a variance of 1.” (García-Peñalosa et al., 2022, p. 14) important thing to think about when dealing with cross-comparisons of different cohorts.

“For children, we observe wages, which are reported at each wave. We adjust for inflation using the consumer price index provided by the UK Oﬀice for National Statistics.” (García-Peñalosa et al., 2022, p. 14)

“This classification follows the job-polarization literature and is consistent with that used in Goos et al. (2014) and Mahutga et al. (2018).15 Table A.1 in the appendix presents the classification. For completeness, we also include a fourth category—individuals who are outof-work.” (García-Peñalosa et al., 2022, p. 15)

“Since individuals give their address at each interview, we also have their location history. We focus on the region of residence at the age of 16 because it is the age at which the parental income variable is defined. The classification is prior to 1994 and thus uses the Government Oﬀices for the Regions (GORs). We therefore rely on the Standard Statistical Regions (SSR).” (García-Peñalosa et al., 2022, p. 15)

“The model highlights not only the importance of polarization for social mobility, but also the fact that transitions across occupations—i.e. intra-generational occupational dynamicsare an essential aspect of inter-generational mobility.” (García-Peñalosa et al., 2022, p. 36)

“When we turn to the regional analysis, our results indicate that the effect of parental background on the child’s occupation is strongest where the share of middling jobs is lowest. Moreover, our analysis of local mobility patterns finds that regions where employment polarization rose the most across the two cohorts are also those where immobility increased the mos” (García-Peñalosa et al., 2022, p. 37)