Social Mobility and Its Measurements

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In the United States of America, it is known and described as the ‘’American Dream’’. How¬ever, this term belongs to a broader definition which economists and sociologists refer to as Intergenerational mobility. Intergenerational mobility indicates the opportunity for children to move beyond their social origins and obtain a status not dictated by that of their parents. Some may argue that the socioeconomic status of parents influences the socioeconomic status of their children. Others, support that this is partially true, however, there are many variables that vary such as social class, occupation, earnings, or family income, and the combination of all those sets, to which extend the social and economic status has an influence on the trans¬mission across generations.

Firstly, this paper interprets the meaning of intergenerational mobility, the ways that it can be measured and investigates the reasons why its awareness is rising in the society. Secondly, it shows the relationship between mobility and inequality, followed by the factors that appear to influence such a phenomenon, while it examines if intergenerational mobility remained steady or has changed over time. Finally, it provides information about the degree of mobility in specific countries and regions and reveals what experiments show us about it.

As defined in the dictionary Intergenerational mobility in sociology refers to the movement within or between social classes and occupations, the change occurring from one generation to the next. Particularly, mobility reflects the extent to which individuals move up (or down) the social ladder compared to their parents. A society can be presumed depending on its mo¬bility, on whether the parent-child correlation and social status as adults is weaker or stronger. In a comparatively immobile society an individual’s earnings, education or occupa¬tion is in favor of being particularly linked to socioeconomic status of his/her parents. Inter¬generational mobility depends on different variables that indicate the individual economic success, some linked to the inheritability of traits, others related to the family and social envi¬ronment or policies in which individuals develop.

What is being examined at the first part of this report is how mobility can be measured. The appraisal of intergenerational associations is requiring adequate data and dependable infor-mation on the socioeconomic status between two different generations. Furthermore, the ways of measuring intergenerational mobility vary in different factors. Among the most com¬mon variables are the educational procurement, income and “social class”, each of which have noticeable recognitions and restrictions with respect to their appraisal and perception. Parent-child associations are not the only measure for the importance of family background, and recent research on multigenerational suggests that they may understate the transmission of advantages, Stuhler (2018).

In addition, only a low percentage of parental and child relationships in socio-economic sta-tus is a result of the causal effect of status itself. Alternatively, intellectual and non-intellec¬tual skills seem to be significant intermediaries, and children tend to simulate their parental model; this means adopting their preferences, attitudes, beliefs and sometimes their behavior as well. Despite the fact that genetic transmission is crucial, the literature as well provides abundant documentation that the childhood environment is critical, and as Stuhler (2018) states ‘’policies and economic shocks can have substantial intergenerational spill-over ef¬fects’’.

In many countries, children are placed into different school systems based on their capabili-ties and skills. There is significant proof that the distinction of children based on their abili-ties at a young age has a tendency on lowering the socio-economic mobility. This outcome is based on conducted research that shows variety of differences in the timing of school reforms across regions within a country but is also compatible with cross-country comparisons from international achievement tests.

Intergenerational mobility is firmly linked to inequality more generally. The idea of low in-tergenerational mobility is significant if inequality is high. On the contrary, how inequalities are anticipated, rely on the degree to which they are relayed from parents to their children, transmitted across generations. For instance, whilst market-based economies may potentially generate high levels of income inequality, some may argue that there is a tendency to gener¬ate higher intergenerational mobility, inequalities may be more acceptable if there is at least one opportunity for everyone to achieve success.

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Nonetheless, according to Stuhler (2018) income inequality rates have been increasing in many countries over the past decades, and research conducted in the 1990s and 2000s indi-cated that those inequalities in fact are much more relentless across generations than what it was believed previously. These improvements have restored the lack of interest in mobility research, not only within the sociological literature in which the topic has been identified as fundamental, but also in economics, in which the concerns about distribution are growing at¬tention. Countries with higher income inequality also have a tendency to be countries in which a greater fraction of economic advantage and disadvantage is passed on between parents and their children Corak (2013). Alan Krueger has referred to as “The Great Gatsby Curve.” Figure 1 depicts an example.

Figure 1, is showing the correlation between income inequality and intergenerational mobility, using evaluations of the intergenerational income elasticity obtained from studies that have been published for the adjustment in methodological approach. With that being said, these evaluations are displayed, not as the best available evaluations for any specific country, but instead as the suitable evaluations to compare across countries. According to Corak (2013) ‘’Analyzing a broader group of countries, I find that many of the lower-income countries oc¬cupy an even higher place on the Great Gatsby Curve than depicted for the OECD countries in Figure 1, but this is likely due to structural factors not as relevant to a discussion of the high-income countries’’.

This specific part of the report reveals evidence on how mobility varies between countries, over time, or along other dimensions. The income mobility in the vast majority of the coun-tries that belong to the European Union seems to be higher, compared to the one in the US. In countries such as UK and Italy, is relatively low, however in Nordic countries appears to be surprisingly high. In addition, in areas within countries, Income mobility rates vary signifi¬cantly. The cross-country pattern in education seems similar as in income and illustrates a low educational mobility in the European countries of the Eastern hemisphere. In the con¬trary, the cross-country ranking based on occupation and social status measures, vary signifi¬cantly from the pattern recognized in measures of educational or income mobility.

Whilst mobility rates grew during the first half of the 20th century in many countries, recent time trends seem less decisive. Research on mobility trends require thorough data, and per-haps may be inadequate to acquire steady changes over time. Due to the fact that income ine¬quality and income mobility have a tendency to be linked in a non-positive way, simultane¬ously both across countries and across areas within countries, there is demanding interest on Intergenerational mobility trends in those countries where income inequality has been in¬creasing as Stuhler (2018) mentions.

Alesina, Stantcheva, and Teso (2018) selected different countries such as the United States, Sweden, Italy, France, and the United Kingdom, which was intended to fulfil the desire of covering a decent range of economic, social, and political experiences. For them to achieve a successful measurement of the intergenerational mobility, they used the best available knowledge they could retrieve from the data they owned. For the description of the sources of the data, they referred to the first generation as the “parents” and to the second generation as the “children.”

Information on intergenerational mobility for the United States of America arises from Chetty (2014) and is built upon administrative tax records that cover the universe of taxpayers for the range of years 1996–2012. The parents’ earnings are measured as average total pre-tax household income over the years 1996–2000. Children belong to the 1980–1985 cohorts and their family income is measured in 2011 and 2012.

For Italy, the data on mobility for come from Acciari, Polo, and Violante (2016) and are built upon administrative tax records that cover the universe of all taxpayers between ages 35 to 55 in the years 1998 and 1999. Children’s earnings are measured in 2011 and 2012, and while completing their 37th and onwards. The available data for Sweden is from Jäntti (2006). Administrative data has been used from the Statistics Sweden Register, composed of a random 20 per cent sample of all male children born in the year 1962. For the parental generation, fathers’ income is only measured in 1970, 1975, and 1980. The children’s’ income is measured in 1996 and 2000, when they complete their 34th and 38th year, and are averaged over these two years.

For the UK, the data source used is the British Cohort Study on fathers and sons. The sample of children conducted is consisted of 2,806 males, all born in a single week in 1970. Their income is measured in 2004, when they complete their 34th years. For fathers, the earnings are the average in the years 1980 and 1986, when their children completed the 10th and 16th years.         

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