Nonlinear Estimation of Lifetime Intergenerational Economic Mobility and the Role of Education

Previous studies of intergenerational income mobility have typically focused at on estimating persistence across generations at the mean of the distribution of sons' earnings. Here, we use the relatively new unconditional quantile regression (UQR) technique to consider how the association between parental income in childhood and sons' adult earnings vary across the distribution of sons' earnings. We find a J-shaped relationship between parental income and sons' earnings, with parental income a particularly strong predictor of labour market success for those at the bottom, and to a greater extent, the top of the earnings distribution. We explore the potential role of early skills, education and early labour market attachment in this process. Worryingly, we find that education is not as meritocratic as we might hope, with the role of parental income dominating that of education at the top of the distribution of earnings. Early unemployment experience has long-lasting impacts on sorting those at the bottom, alongside parental income.