Intergenerational Mobility and Labor Market Inclusion

The primary objectives of this project are to enhance our knowledge about the determinants of intergenerational mobility, to characterize recent changes in mobility and the causes behind them, and to assess the influence of institutions and policies in the shaping of equality of opportunities. Below, we briefly present a selection of recent results from the project. In the paper “The Rising Influence of Family Background on Early School Performance” Simen Markussen and Knut Røed use administrative data from Norway to examine recent trends in the association between parents’ prime age earnings rank and offspring’s educational performance rank by age 15/16. We show that the intergenerational correlation between these two ranks has increased over the past decades, and that offspring from economically disadvantaged families have fallen behind. This has happened despite public policies contributing to leveling the playing field. We show that the expansion of universal childcare and, more recently, the increased teacher-pupil ratio in compulsory school, have disproportionally benefited lower class offspring. The rising influence of parents’ earnings rank can partly be explained by a strengthened intragenerational association between earnings rank and education among parents, as educational achievement has an inheritable component. Yet a considerable unexplained rise in the influence of family background remains, consistent with evidence pointing toward increased parental involvement in children’s lives, plausibly in response to higher returns to education. The paper is published in the Economics of Education Review. In the paper “Educational expansion reforms and intergenerational educational mobility in Norway”, Adrian Farner Rogne examines the impacts on intergenerational mobility of the massive expansion of the higher educational system in Norway. Most previous studies of these developments are based on analyses of aggregate trends in educational attainment and mobility and have thus overlooked the geographical dimension of educational expansions. The geographic location of colleges and the local availability of higher educational institutions may have had important impacts on local patterns of intergenerational educational mobility. Farner studies the impacts of major educational expansion reforms that took place between 1969 and 1993 in Norway, which resulted in a massive decentralization of higher educational opportunities. Combining recent developments in difference-in-differences methodology, detailed data on the establishment and upgrading of such institutions, and population-wide register data on social origins and educational attainment, he studies the effects of the establishment and upgrading of local colleges on educational mobility. Results suggest that these improvements in local educational opportunities had little to no impact on intergenerational educational mobility. The paper is submitted to a scientific journal, and can be downloaded here: https://osf.io/preprints/socarxiv/athxq/ The paper “The intergenerational transmission of social advantage and disadvantage: comprehensive evidence on the association of parents’ and children’s educational attainments, class, earnings, and status” is written by Arne Mastekaasa and Gunn E. Birkelund. It provides evidence on the associations between four parental origin measures – class, status, earnings and education – and the corresponding outcomes of offspring. It also extends previous research on differences in parental background influences at different levels of the children’s educational attainment, and compare the predictive power of the social origin measures with regard to children’s top and bottom achievements on all outcomes. The paper uses Norwegian administrative data for nearly 500,000 individuals born between 1961 and 1970. The analyses show that parents’ education is a much stronger predictor for all offspring outcomes than are their social class and status positions – both taken separately and together. Parental education also outperforms parents’ earnings, except when the offspring outcome is also earnings. Thus, parents’ premarket characteristics seem to be more important than their labor market achievements for their children’s outcomes. A second major finding is that the predictive power of social origins is often quite similar for advantaged and disadvantaged outcomes. However, bottom earnings are much less strongly associated with social origins than are top earnings. The paper is published in European Societies.

The primary objectives of this project are to enhance our knowledge about the determinants of intergenerational mobility, to characterize recent changes in mobility and the causes behind them, and to assess the influence of institutions and policies in the shaping of equality of opportunities. Equality of opportunities is a widely accepted aim of economic and social policies. It implies that offspring born into poor families have the same chances in life as those born into richer families, and thus that there is high degree of intergenerational mobility. Recent empirical evidence has indicated that intergenerational mobility has come under pressure in Norway, and that people born into the poorest families have fallen behind in terms of employment, earnings, and a range other of quality-of-life indicators. This project examines the sources behind this development, and provides a systematic empirical assessment of the determinants of mobility, both in terms of external influences, such as technological developments, trade and, migration, and in terms of institutional factors, such as the organization of childcare and education, the degree of wage compression, integration policies, and the overall income and wealth inequality. The project is empirical, and will primarily be based on administrative register data from Norway, covering labor market and educational outcomes for three generations. It has a strong comparative component in that it will compare mobility trends in Norway and Sweden, with the aim of identifying the institutional origins of observed differences. In particular, we are interested in examining whether the Swedish policy of subsidizing the demand for low-skill workers have succeeded in preventing the apparent falling-behind of the lower classes observed in Norway. The project is inter-disciplinary. It has a strong methodological component, and will seek to assess the various “class concepts” encountered within economics and sociology.