Egalitarianism Under Pressure: Toward Lower Economic Mobility in the Knowledge Economy?

59 Pages Posted: 10 Apr 2017

See all articles by Simen Markussen

Simen Markussen

University of Oslo - Ragnar Frisch Centre for Economic Research

Knut Roed

Ragnar Frisch Centre for Economic Research; IZA Institute of Labor Economics

Abstract

Based on complete population data, with the exact same definitions of family class background and economic outcomes for a large number of birth cohorts, we examine post‐war trends in intergenerational economic mobility in Norway. Despite only mild fluctuations in standard rank‐based summary statistics, we show that men and women born into the lowest parts of the parental earnings rank distribution have fallen considerably behind in terms of several quality‐of‐life outcomes, such as earnings rank, earnings share, employment propensity, educational attainment, and the establishment of a family. In particular, the prime-age employment rates of lower class sons have declined spectacularly, both because their rank outcomes have deteriorated and because the lowest ranks to an increasing extent have become associated with non-employment rather than low‐wage employment. We provide suggestive evidence that higher educational requirements in the labor market has increased the importance of parental encouragement and support and thus enlarged the handicap of being born into a less resourceful family. There is no evidence whatsoever of a relative decline in the lower classes' cognitive abilities.

Keywords: intergenerational mobility, inequality, cognitive ability

JEL Classification: J62, D63, J24

Suggested Citation

Markussen, Simen and Røed, Knut, Egalitarianism Under Pressure: Toward Lower Economic Mobility in the Knowledge Economy?. IZA Discussion Paper No. 10664, Available at SSRN: https://ssrn.com/abstract=2949100

Simen Markussen (Contact Author)

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

Knut Røed

Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0349 Oslo
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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