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

Published online by Cambridge University Press:  26 March 2020

Jo Blanden  and
Stephen Machin
Jo Blanden*
Affiliation:
Department of Economics, University College London and Centre for Economic Performance, London School of Economics
Stephen Machin*
Affiliation:
Department of Economics, University College London and Centre for Economic Performance, London School of Economics
*
e-mail J.Blanden@surrey.ac.uk
e-mail s.machin@ucl.ac.uk
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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 non-cognitive 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 and in the absence of any significant unanticipated changes, the decline in intergenerational mobility that occurred between 1958 and 1970 birth cohorts is unlikely to continue for cohorts born from 1970 to 2000. Mobility is therefore likely to remain at or near the relatively low level observed for the 1970 birth cohort.

Keywords

intergenerational mobilitychildrenJ62J13

Information

Type
Articles
Information
National Institute Economic Review , Volume 205 , July 2008 , pp. 101 - 116
Copyright
Copyright © 2008 National Institute of Economic and Social Research

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Footnotes

∗

This project was generously supported by the Sutton Trust. We would also like to thank Richard Murphy, Elizabeth Jones, Kirstine Hansen and Rachel Rosenberg for help with the data.

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