Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality

59 Pages Posted: 24 Dec 2011

See all articles by Jo Blanden

Jo Blanden

University of Surrey; London School of Economics; IZA Institute of Labor Economics

Paul Gregg

University of Bath - Department of Social and Policy Sciences

Lindsey Macmillan

University of Bristol

Abstract

Family income is found to be more closely related to sons' earnings for a cohort born in 1970 compared to one born in 1958. This result is in stark contrast to the finding on the basis of social class; intergenerational mobility for this outcome is found to be unchanged. Our aim here is to explore the reason for this divergence. We derive a formal framework which relates mobility in measured family income/earnings to mobility in social class. Building on this framework we then test a number of alternative hypotheses to explain the difference between the trends, finding evidence of an increase in the intergenerational persistence of the permanent component of income that is unrelated to social class. We reject the hypothesis that the observed decline in income mobility is a consequence of the poor measurement of permanent family income in the 1958 cohort.

Keywords: intergenerational income mobility, social class fluidity, income inequality

JEL Classification: J13, J31, Z13

Suggested Citation

Blanden, Jo and Gregg, Paul and Macmillan, Lindsey, Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality. IZA Discussion Paper No. 6202, Available at SSRN: https://ssrn.com/abstract=1976533 or http://dx.doi.org/10.2139/ssrn.1976533

Jo Blanden (Contact Author)

University of Surrey ( email )

Guildford
Guildford, Surrey GU2 5XH
United Kingdom

London School of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Paul Gregg

University of Bath - Department of Social and Policy Sciences ( email )

Claverton Down
Bath, BA7 2AY
United Kingdom

Lindsey Macmillan

University of Bristol ( email )

University of Bristol,
Senate House, Tyndall Avenue
Bristol, Avon BS8 ITH
United Kingdom

HOME PAGE: http://www.bris.ac.uk/depts/CMPO/people/biomacmillan.htm

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