Close
Carl Singleton, University of Reading and James Best, Tepper School of Business, Pittsburgh
(Project no. 1004250)
The intergenerational persistence of economic outcomes in England and Wales have previously been documented using the ONS Longitudinal Study (ONS-LS) by Sturgis & Buscha (2015) & Buscha and Sturgis (2016).
There is an open debate concerning the determinants of the intergenerational persistence of economic outcomes. One suggestion is that this is driven by the level of inequality in societies, coined the "Great Gatsby Curve'' (Krueger, 2012); positive economic outcomes are determined by privilege, and privilege is exacerbated by inequality. An alternative argument is that there is a substantial transmission of capabilities from parents to children (Herrnstein & Murray, 1994). The policy implications of low intergenerational mobility and high inequality depend greatly on the extent to which these features of the economy are explained by genetic variation; the extent to which they are explained by variation in the environment provided for children; and the interaction between genes and childhood environment.
The aim of this research therefore is to use the ONS-LS for England and Wales to empirically disentangle these two principal explanations of intergenerational persistence. We will adapt the methodology of Best (2015) for this. Currently, this methodology is focused on decomposing the intergenerational persistence of income, but we will apply this instead to the economic outcomes which can be observed for Longitudinal Study (LS) members and their parents. The most significant feature of the ONS-LS for this research question is the sampling design. There is a substantial literature, prominently begun by Taubman (1976), which has used a twins decomposition approach (the ACE model), to estimate the effect of genetic endowments in accounting for the variance of some economic outcome, as opposed to the effect of environment, neighbourhood or family factors. The innovation of Best (2015) is to nest this model within an intergenerational framework. The simplest version of Best (2015) would only require population inter-generational and inter-sibling elasticities of some economic outcome. However, the ONS-LS should also allow us to go further and identify more robustly the genetic channel using the unusually large sample of twins amongst LS members, generated by the fact these are sampled by birth date. From discussions with a User Support Officer at CeLSIUS, and power calculations using data on the twinning rate in the UK population, we are confident we will be able to see a sufficiently large sample of LS members who are siblings or twins, see them at a young age alongside the outcomes of their parents, and then observe the outcomes of these LS members over time, such as highest educational qualification, occupation, employment status and socio-economic status. One substantial limitation of this empirical study will be that we cannot identify sets of "identical'' (or mono-zygotic) twins. Nonetheless, under assumptions regarding the proportion of same-sex twin LS members who are likely to be "identical", we will nonetheless be able to estimate an intergenerational equivalent of the ACE model. As is common with the sibling decomposition literature, there are likely to be many assumptions and caveats that must be applied to any results.
To the best of our knowledge, this research would represent the first empirical study attempting to disentangle the role of genetic transmission in the determination of economic intergenerational persistence. One especial contribution to the literature around the ACE model, and geno-economics more generally, is that this would be using a data source representative of the whole UK population. Many previous studies rely on sub-sets of the population, such as US male military enlistees in Taubman (1976). The closest study to our own, using excellent Swedish data, would be that of Bjorklund & Jantti (2009, 2012), though this does not address any intergenerational relationships in outcomes.
References:
Best, J. (2015). Identifying the Determinants of Intergenerational Mobility. mimeo.
Björklund, A., & Jäntti, M. (2009). Intergenerational income mobility and the role of family background. Oxford Handbook of Economic Inequality, Oxford University Press, Oxford.
Björklund, A., & Jäntti, M. (2012). How important is family background for labor-economic outcomes?. Labour Economics, 19(4), 465-474.
Buscha, Franz, and Patrick Sturgis. "Declining social mobility? Evidence from five linked censuses in England and Wales 1971-2011." British Journal of Sociology (2016): 1-32.
Murray, C., & Herrnstein, R. (1994). Bell curve: Intelligence and class structure in American life. Simon and Schuster.
Krueger, A. (2012). The rise and consequences of inequality. Presentation made to the Center for American Progress, January 12th. Available at http://www. americanprogress.org/events/2012/01/12/17181/the-rise-and-consequences-of-inequality.
Sturgis, P., & Buscha, F. (2015). Increasing inter‐generational social mobility: is educational expansion the answer?. The British Journal of Sociology, 66(3), 512-533.
Taubman, P. (1976). The determinants of earnings: Genetics, family, and other environ