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

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  • Blanden, Jo

    (University of Surrey)

  • Gregg, Paul

    (University of Bath)

  • Macmillan, Lindsey

    (University College London)

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.

Suggested Citation

  • Blanden, Jo & Gregg, Paul & Macmillan, Lindsey, 2011. "Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality," IZA Discussion Papers 6202, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6202
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    More about this item

    Keywords

    intergenerational income mobility; income inequality; social class fluidity;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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