The Link between Family Background and Later Lifetime Income: How Does the UK Compare with Other Countries?
The link between family background and labour market outcomes is an issue of great academic, social and political concern. It is frequently claimed that such intergenerational associations are stronger in Britain than in other countries. But is this really true? I investigate this issue by estimating the link between parental education and later lifetime income, using three cross-nationally comparable data sets covering more than 30 countries. My results suggest that the UK is broadly in the
... s broadly in the middle of the cross-country rankings, with intergenerational associations notably stronger than in Scandinavia but weaker than in eastern Europe. Overall, I find limited support for claims that family background is a greater barrier to economic success in Britain than in other parts of the developed world. Policy points r Previous work has offered conflicting messages regarding the strength of the association between the socio-economic circumstances of parents and children in the UK compared with other countries. I Fiscal Studies investigate these relationships further using a number of different measures of socio-economic background and a number of different data sets. r The similarity of my findings across data sets and measures of socioeconomic background is striking. My results suggest that the UK sits in the middle of the cross-country rankings, with lower levels of mobility than a number of western countries -including Scandinavia, but also Australia, Canada and Germany -and higher levels of mobility than the United States and much of eastern Europe. r These results hold for offspring with average earnings. Comparing individuals who end up lower down the earnings distribution shows that the effect of parental socio-economic background is stronger in the UK than in most other countries, suggesting that higher socio-economic-status families in the UK are particularly good at preventing significant downward mobility for their children.