Introduction

Intergenerational mobility is about the degree to which one generation affects the next. Researchers have frequently quantified intergenerational mobility by calculating the extent to which parents' circumstances predict the circumstances of their children in adult life.[1] Intergenerational mobility has been tested using data on economic outcomes, educational qualifications, health status and behavioural and personality traits (Black and Devereux, 2010, pp. 58-67). This paper tentatively tests the relationship in New Zealand between parents’ economic situation and the subsequent economic situation of their grownup children.

Researchers are frequently interested in intergenerational economic mobility because of its implications for equality of opportunity. Barriers to people developing and making full use of their abilities could potentially hinder skills development, productivity growth, and the achievement of improved living standards (Atkinson, Maynard and Trinder, 1983, pp. 13-17; Causa and Johansson, 2009, pp. 5, 23; OECD, 2008b, p. 3). However, as the next section notes, some policies that promote intergenerational mobility could also hinder the achievement of these goals.

Researchers have found that the effect of family background on a person's adult outcomes varies between countries. Factors that influence the rate of intergenerational economic mobility include the effectiveness of a country's education system, the rate of economic growth, the physical environment children experience and the freedom and opportunity people have to use their capabilities (Blanden, 2008, pp. 19-25; Cabinet Office Strategy Unit, 2008a, pp. 4, 63). Intergenerational income mobility is a relatively new research area, and there are still no estimates available for more than half the OECD countries (Blanden, 2008, p. 2; OECD, 2008b, p. 5).

Section 1 outlines why researchers are interested in intergenerational mobility. More technical sections are then included on the methods used to calculate intergenerational mobility and the obstacles to accurately doing so. In contrast, Sections 2.2 and 2.3 on comparing and explaining rates of mobility in different countries are likely to be of interest to many readers. Income and occupational intergenerational mobility rates are then tentatively quantified using income data from the population of people born in the New Zealand city of Dunedin in 1972-73 and nationwide survey data on people's occupations and the occupations of their parents. Readers who skim these sections should still be able to understand Section 6, which cautiously compares the rates of intergenerational mobility for people in developed countries, and Section 7, which concludes the paper. Although the detailed Appendix is intended for other researchers, the unique information in Section 8.1.4 on people from Dunedin living in different countries will be of interest to migration researchers.