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INTERGENERATIONAL TRANSMISSION OF SOCIO-ECONOMIC STATUS: There is no simple law of mobility

  • Published Date: July 2018

High profile claims that social mobility across centuries and across countries is low and immutable are not supported by the evidence, according to research by Kelly Vosters, published in the July 2018 issue of the Economic Journal.

Her study tests the implications of a provocative hypothesis about the ‘intergenerational persistence’ of socio-economic status put forward in a highly publicised body of work by the prominent economic historian, Gregory Clark.

Using data on various socio-economic outcomes for individuals with certain rare surnames, he and several co-authors conclude that the ‘true’ rate of intergenerational persistence is about 0.7-0.8 in all societies and always has been.

These controversial conclusions directly contradict notable results from the large body of existing work, which finds substantial variation across countries in intergenerational associations – and most of these estimates are considerably less than 0.7.

Clark says these prior studies understate intergenerational persistence by using a single measure of status (such as income). He claims any particular measure we observe is an error-ridden proxy for a broader underlying social status. Further, he suggests, if we were to measure status as an aggregation of multiple measures in conventional datasets, then the estimated persistence would be closer to the ‘true’ rate of 0.7-0.8.

The new study directly tests this claim by using a suitable method to combine information from multiple measures of status available in the US Panel Study of Income Dynamics, using a sample of fathers and sons similar to that used in prior studies.

The results do not show that this aggregation leads to higher estimates of persistence. Rather, the estimates relating son’s status to father’s status rise only from 0.44 based on income alone, to a slightly higher 0.47 after incorporating father’s education and occupation – still in line with prior research and far from 0.7-0.8.

The contributions of the new study are thus twofold. First, it shows that focusing on one measure of status does give us a reasonable picture of intergenerational mobility, even when one would like to consider a broader concept of socio-economic status.

Second, it shows that Clark’s claim about biased estimates in prior studies is incorrect, so this cannot explain the discrepancies between his work and other studies. Other researchers have provided some evidence and discussions specific to Clark’s results, which reflect a kind of group-level mobility for the particular surnames chosen rather than individual-level mobility in a society.

ENDS


‘Is the Simple Law of Mobility Really a Law? Testing Clark’s Hypothesis’ by Kelly N. Vosters

Kelly Vosters is assistant professor of economics at the Belk College of Business, University of North Carolina at Charlotte.

For further information: contact Romesh Vaitilingam on +44-7768-661095 (email: romesh@vaitilingam.com; Twitter: @econromesh); or Kelly Vosters via email: kvosters@uncc.edu