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Centre for Market and Public Organisation

Centre for Market and Public Organisation. Intergenerational Mobility: The Next Generation Based on work by Jo Blanden, Paul Gregg and Lindsey Macmillan, Longview Seminar 29th June 2007 . Introduction & Background.

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Centre for Market and Public Organisation

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  1. Centre for Market and Public Organisation Intergenerational Mobility: The Next Generation Based on work by Jo Blanden, Paul Gregg and Lindsey Macmillan, Longview Seminar 29th June 2007.

  2. Introduction & Background • “Most people are willing to accept wide inequalities if they are coupled with equality of opportunities”–The Economist (Oct 2006) • This year I will be Talking More about Social Mobility – David Cameron Today Programme, Radio 4 (Jan 2007)

  3. Introduction & Background Intergenerational Income Mobility • How closely related are incomes of parents and children? Social Mobility • How closely related is the Social class of parents and children? • Also other outcomes

  4. Introduction & Background • Literature was mostly concerned with measurement, i.e. the strength of the correlation between income across generations. • More recently comparisons across countries and across time have begun to emerge • 2 substantive findings: In terms of Income based mobility • UK relatively immobile (along with US) • Mobility in UK has declined between 1958 and 1970 birth cohorts

  5. Methodology Intergenerational Income Mobility

  6. Introduction & Background Recent and On-going CMPO/CEE Research • 1. Drivers of Mobility • 2. Comparing Drivers of Mobility across cohorts • 3. Projecting Mobility for Current generations

  7. Plan of the Talk • Consider the routes through which income persists for the 1970 (BCS) cohort. The objective is to understand the drivers of persistence. • Analysis is restricted to sons at this stage. • Make comparisons between the 1958 (NCDS) and 1970 cohorts in an attempt to understand why intergenerational transmissions have strengthened. • Extend analysis to earlier and later cohorts for within data restrictions

  8. Drivers of Mobility –Modelling approach

  9. Data – British Cohort Study (1) • Parental income data available at ages 10 and 16, average these. • Sons’ earnings at age 33. • Cognitive tests at age 5 and 10. • Mother reports on behaviour age 5. • Teacher reports on behaviour and self-reported measures at age 10. • Detailed education information including exam results. • Work history records from age 30 enable the construction of number of months unemployed and out of labour force.

  10. Data – British Cohort Study (2) • Cognitive tests • Age 5: copying and english picture vocab test • Age 10: reading, maths, British ability scale • Non-cognitive measures • Mum, age 5: neurotic, anti-social • Teacher, age 10: application, clumsiness, extroversion, hyper-activity, anxious. • Child, age 10: locus of control, self-confidence. • Child, age 16: malaise. • All cognitive and non-cognitive measures are normalised to mean 0, standard deviation 1.

  11. Family income relationships - 1970

  12. Earnings Equations at age 30

  13. Data – Cross cohort comparison • Income is only available at age 16 in NCDS. Earnings are from age 33. • Cognitive tests for reading, maths and general ability at 11, similar to BCS. • Non-cognitive tests are different between the cohorts, use Bristol social adjustment scales for NCDS. • unforthcoming, withdrawn, depressed, anxious for acceptance adults, hostile to adults, ‘writing off’ adults, anxious for acceptance kids, hostility to kids, restless, inconsequential behaviour, misc. • For both cohorts mother reports generate two measures from rutter scales at age 10, internalising and externalising. • Concerns about attrition and non-response in both cohorts, no evidence that this is responsible for cross-cohort differences.

  14. The change in intergenerational mobility

  15. Policy implications • Fall in mobility was explained by growing relationship between family income and non-cognitive skills, education and early unemployment. • Not due to IQ or cognitive skills. • 3 possible policy routes • Close gap in non-cognitive skills (especially personal efficacy and concentration). • Educational performance at age 16 and beyond. • Help in early career (policies to avoid NEET).

  16. Conclusions • Overall nearly 90% of the increase in intergenerational income is explained using the first approach • 20% of this rise is accounted for by the increasing correlation between income and O levels • 35% through post-16 education (A-levels, degree etc) • 30% through early L|M attachment – youth unemployment/NEETs • None came through innate cognitive ability being more related to family background and ability became less important in predicting education attainment • It is from within social class variation in income that the increase in persistence has occurred

  17. 2. Extending the Story • Intergenerational Mobility has an ageing problem, to observe the full cycle takes at least 30 years. • But we can observe the childhood drivers of mobility evolving much quicker – Family income relationship with test scores, education etc. • And can observe returns of the most recent cohort available – this can provide a prediction of mobility for the generation of children. • Also the earlier 1946 cohort offers further insight into past intergenerational patterns

  18. Four Cohorts • Two Parts • Family Income and educational attainment at age 18 (58,70,75-80, 81-86 - BHPS) or – at 21 (58,70, 75-80) • Family Income and Test scores (58,70,91/2)

  19. Observable data for first stage analysis • 1958 1970 1975-86 1991/2 • Family income √ √√√ • Parental Education √√√√ • Childs Education √√√ • Cognitive scores √√√ (at age 10/11) • Self-esteem √√ • Locus of Control √√ • Application √√√ • Adult Earnings √√

  20. Relationship between family income and Childs Education

  21. Returns to education – NCDS, BCS and ‘BHPS old’

  22. Summary • Family Background and test scores show very similar patterns over time (46-70) • Relationship between Family Income and Educational qualifications strengthened and then receded • Returns to qualifications very stable 1991 to 2002

  23. Some Assumptions • Assume returns remain the same for next cohort • Assume residual earnings and family income have similar relationship

  24. Run on to Later BHPS Cohort

  25. And Finally - ALSPAC

  26. Conclusions 1 • Cross cohort comparisons are difficult for data comparability reasons • Relationships between family background and cognitive test scores (age 10) are very stable • Educational attainment appears to have became more socially graded but this maybe easing

  27. Conclusions 2 • Making some assumptions about returns to education and the extent to which residual earnings are related to family background we can project future mobility patterns • This suggests that for children born in early 1980s (and left school around 2000), mobility had return to the pictures observed for the 1958 children

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