The report "Intergenerational Transmission of Disadvantage: Mobility or Immobility across Generations? A Review of the Evidence for OECD Countries" surveys the research in OECD countries on intergenerational mobility – i.e. the extent to which key characteristics and life experiences of individuals differ from those of their parents. A number of findings emerge.
Intergenerational earnings mobility varies significantly across countries. It is higher in the Nordic countries, Canada and Australia but lower in Italy, the United States and the United Kingdom. The extent of intergenerational earnings mobility depends on individuals' and households' characteristics and varies over the income distribution (i.e. mobility is lower at both the top and the bottom of the distribution in many countries). Various studies also show that: (i) countries where both income inequality and rewards to education are higher, display lower intergenerational earnings mobility; and (ii) the degree of persistence of family income across generations is stronger than that of earnings.
Education is a major contributor to intergenerational income mobility and educational differences tend to persist across generations. The range of family characteristics that shape educational mobility across generations includes ethnic origin, the language spoken at home, family size and structure, and the socio-economic and cultural background of the parents. Moreover, some of the cross-country differences in the extent of intergenerational mobility of education are shaped by policies. For example, early streaming of students, based on their ability, seems to considerably reduce mobility across generations.
Evidence of intergenerational immobility extends to other outcomes. For example, occupations persist across generations and this persistence depends on factors such as education and also race or migrant status. Wealth also persists heavily across generations: as they are larger at the top of the income distribution, wealth transfers may deepen inequality. Welfare receipt is also transmitted across generations and this transmission appears to be influenced by specific aspects of programme design. Finally, personality traits also tend to persist across generations and affect both labour market outcomes and decisions about family formation: for example, children of divorced parents are more likely to divorce when they are adults.
Early and sustained investment in children and families can help. A key role is played by early childhood education, care and health. Financial transfers and in-kind services to parents are also important as they provide them with the resources to better rear and care for their children. Overall, a strategy based on a greater investment in children holds the promise of breaking the cycle of intergenerational disadvantages because of its effects in reducing child poverty and contributing to child development.
Low intergenerational mobility has important policy implications as it implies that the life chances of individuals will partly reflect characteristics for which they are not responsible. However, it should be emphasized that, while it is often possible to quantify the extent of intergenerational mobility with a single number (e.g. in the case of income), this quantification does not imply a judgement about what mobility should be. No society is completely mobile or immobile and some of the mechanisms contributing to intergenerational persistence of outcomes are both acceptable and indeed desirable. This underscores the importance of identifying what measures are most effective in reducing some of the inequalities of opportunities that are associated with different birth endowments.
Read the report : Intergenerational Transmission of Disadvantage: Mobility or Immobility across Generations? A Review of the Evidence for OECD Countries