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This paper breaks new ground by providing comparable estimates of intergenerational wage and education persistence across 14 European OECD countries based on a new micro data from Eurostat. A further novelty is that it examines the potential role of public policies and labour and product market institutions in explaining observed differences in intergenerational wage mobility across countries. The empirical estimates show that intergenerational wage persistence is relatively high in southern European countries, as well as in the United Kingdom. Likewise, intergenerational persistence in education is relatively high both in southern European countries and in Luxembourg and Ireland. By contrast, both persistence in wages and education tends to be lower in Nordic countries. In addition, empirical results show that education is one important driver of intergenerational wage persistence across European countries. There is a positive crosscountry correlation between intergenerational wage mobility and redistributive policies, as well as a positive correlation between wage-setting institutions that compress the wage distribution and mobility.

This paper assesses recent patterns in intergenerational social mobility across OECD countries and examines the role that public policies can play in affecting such mobility. It shows that the relationship between parental or socio-economic background and offspring’s educational and wage outcomes is positive and significant in practically all countries for which evidence is available. Intergenerational social mobility is measured by several different indicators since no single indicator provides a complete picture. However, one pattern that emerges is of a group of countries, e.g. southern European countries and Luxembourg, which appears to rank as relatively immobile on most indicators, while another group, e.g. Nordics, is found to be more mobile. Furthermore, public policies such as education and early childcare play a role in explaining observed differences in intergenerational social mobility across countries. In addition, this study also finds a positive cross-country correlation between intergenerational social mobility and redistributive policies.

\"This paper assesses recent patterns of intergenerational social mobility across OECD countries and examines the role that public policies can play. It shows that the relationship between parental or socio-economic background and offspring educational and wage outcomes is positive and significant in practically all countries for which evidence is available. Intergenerational social mobility is measured by several different indicators, since no single indicator provides a complete picture. However, one pattern that emerges is of a group of countries, southern European countries and Luxembourg, which appears to rank as relatively immobile on most indicators, while another group, the Nordic countries, is found to be more mobile. Furthermore, public policies such as education and early childcare play a role in explaining observed differences in intergenerational social mobility across countries.\" Die Untersuchung enthält quantitative Daten. Forschungsmethode: empirisch-quantitativ; empirisch; Querschnitt. Die Untersuchung bezieht sich auf den Zeitraum 2005 bis 2006. (author's abstract, IAB-Doku).

We present new evidence on trends in intergenerational mobility in the United States using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts. For children born between 1971 and 1986, we measure intergenerational mobility based on the correlation between parent and child income percentile ranks. For more recent cohorts, we measure mobility as the correlation between a child's probability of attending college and her parents' income rank. We also calculate transition probabilities, such as a child's chances of reaching the top quintile of the income distribution starting from the bottom quintile. Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the “birth lottery” - the parents to whom a child is born - are larger today than in the past.

Using new cross-country survey and experimental data, we investigate how beliefs about intergenerational mobility affect preferences for redistribution in France, Italy, Sweden, the United Kingdom, and the United States. Americans are more optimistic than Europeans about social mobility. Our randomized treatment shows pessimistic information about mobility and increases support for redistribution, mostly for “equality of opportunity” policies. We find strong political polarization. Left-wing respondents are more pessimistic about mobility: their preferences for redistribution are correlated with their mobility perceptions; and they support more redistribution after seeing pessimistic information. None of this is true for right-wing respondents, possibly because they see the government as a “problem” and not as the “solution.”

This article reviews the sociological and economic literature on intergenerational mobility. Findings on social class, occupational status, earnings, and income mobility are discussed and discrepancies among them are evaluated. The review also examines nonlinearities in the intergenerational association, variation in mobility across advanced industrial countries, and recent mobility trends in the United States. The literature suggests an association between inequality and economic mobility at the country level, with the United States featuring higher inequality and lower mobility than other advanced industrial countries. However, mobility has not declined in the United States over the recent decades in which inequality has expanded. The inequality-mobility relationship fails to emerge when occupational measures of mobility are used, likely because these measures do not fully capture some mechanisms of economic reproduction.

My focus is on the degree to which increasing inequality in the high-income countries, particularly in the United States, is likely to limit economic mobility for the next generation of young adults. I discuss the underlying drivers of opportunity that generate the relationship between inequality and intergenerational mobility. The goal is to explain why America differs from other countries, how intergenerational mobility will change in an era of higher inequality, and how the process is different for the top 1 percent. I begin by presenting evidence that countries with more inequality at one point in time also experience less earnings mobility across the generations, a relationship that has been called “The Great Gatsby Curve.” The interaction between families, labor markets, and public policies all structure a child's opportunities and determine the extent to which adult earnings are related to family background—but they do so in different ways across national contexts. Both cross-country comparisons and the underlying trends suggest that these drivers are all configured most likely to lower, or at least not raise, the degree of intergenerational earnings mobility for the next generation of Americans coming of age in a more polarized labor market. This trend will likely continue unless there are changes in public policy that promote the human capital of children in a way that offers relatively greater benefits to the relatively disadvantaged.

We show that the neighborhoods in which children grow up shape their earnings, college attendance rates, and fertility and marriage patterns by studying more than 7 million families who move across commuting zones and counties in the United States. Exploiting variation in the age of children when families move, we find that neighborhoods have significant childhood exposure effects: the outcomes of children whose families move to a better neighborhood—as measured by the outcomes of children already living there—improve linearly in proportion to the amount of time they spend growing up in that area, at a rate of approximately 4% per year of exposure. We distinguish the causal effects of neighborhoods from confounding factors by comparing the outcomes of siblings within families, studying moves triggered by displacement shocks, and exploiting sharp variation in predicted place effects across birth cohorts, genders, and quantiles to implement overidentification tests. The findings show that neighborhoods affect intergenerational mobility primarily through childhood exposure, helping reconcile conflicting results in the prior literature.

We propose a framework to identify and estimate earnings distributions and worker composition on matched panel data, allowing for two-sided worker-firm unobserved heterogeneity and complementarities in earnings. We introduce two models: a static model that allows for nonlinear interactions between workers and firms, and a dynamic model that allows, in addition, for Markovian earnings dynamics and endogenous mobility. We show that this framework nests a number of structural models of wages and worker mobility. We establish identification in short panels, and develop tractable two-step estimators where firms are classified in a first step. Applying our method to Swedish administrative data, we find that log-earnings are approximately additive in worker and firm heterogeneity. Our estimates imply the presence of strong sorting patterns between workers and firms, and a small contribution of firms—net of worker composition—to earnings dispersion. In addition, we document that wages have a direct effect on mobility, and that, beyond their dependence on the current firm, earnings after a job move also depend on the previous employer.

Is there a relationship between family income inequality and income mobility across generations in the United States? As family income inequality rose in the United States, parental resources available for improving children's health, education, and care diverged. The amount and rate of divergence also varied across US states. Researchers and policy analysts have expressed concern that relatively high inequality might be accompanied by relatively low mobility, tightening the connection between individuals' incomes during childhood and adulthood. Using data from the Panel Study of Income Dynamics, the National Longitudinal Survey of Youth, and various government sources, this paper exploits state and cohort variation to estimate the relationship between inequality and mobility. Results provide very little support for the hypothesis that inequality shapes mobility in the United States. The inequality children experienced during youth had no robust association with their economic mobility as adults. Formal analysis reveals that offsetting effects could underlie this result. In theory, mobility-enhancing forces may counterbalance mobility-reducing effects. In practice, the results suggest that in the US context, the intergenerational transmission of income may not be very responsive to changes in inequality.