A Review of Intergenerational Mobility and its Drivers

This report reviews evidence on intergenerational mobility and the transmission of socio-economic advantages from parents to children. The review examines conceptual questions on how to measure intergenerational mobility, empirical evidence on both descriptive and causal questions, and the data requirements that mobility research faces. The extent of income mobility varies substantially between countries, and appears negatively correlated with income inequality both across and within countries. For this reason, there is particular interest on mobility trends over time in those countries where income inequality has recently been increasing. However, the evidence for mobility trends in more recent cohorts is as yet less conclusive. Descriptive associations can only be suggestive of causal links, and the report also reviews evidence from more targeted research designs on the importance of (i) neighbourhoods and schools, (ii) early childhood and childcare, (iii) educational systems and track choice, (iv) private and public education, and (v) informational frictions and beliefs. The evidence demonstrates that educational policies can affect intergenerational mobility. An important trend in these and other literatures is the increasing use of administrative data sources, such as social security or tax data. The review discusses important hurdles in their adoption for mobility research, and points to data initiatives that could improve our understanding of intergenerational processes in the future.