Intergenerational income persistence within families

Document type
Working Paper
Author(s)
Belfield, Chris; Crawford, Claire; Greaves, Ellen
Publisher
Institute for Fiscal Studies
Date of publication
11 August 2017
Series
IFS Working Paper; W17/11
Subject(s)
Poverty Alleviation Welfare Benefits and Financial Inclusion, Families
Collection
Social welfare
Material type
Reports

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There is substantial evidence of a significant relationship between parents’ income and sons’ earnings in the UK, and that this relationship has strengthened over time. This has been extended by exploring a broader measure of net family income as an outcome. In doing so, three additional trends in social mobility are uncovered. Partnership, and the level of earnings from any partner, are increasingly related to family background. The progressive direct tax and benefit system in the UK acts to offset intergenerational income persistence and has a stronger effect for the later cohort. Finally, men from higher-income backgrounds are significantly more likely than those from lower-income backgrounds to be in paid work and hence have higher incomes. Including out-of-work men in the analysis increases the estimates of intergenerational income persistence.

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