3 - Equal opportunity and intergenerational mobility: going beyond intergenerational income transition matrices

Summary

Policy makers in both Europe and North America often imagine a “new” economy – an economy based upon human capital and skills – as the source of economic growth, and are increasingly concerned with the extent to which all members of their societies are able to participate and experience a rising standard of living. “Access,” “social inclusion,” and “equality of opportunity” are the terms by which public policy changes are often judged, and there is as a result a strong need for indicators of the extent to which social institutions embody these characteristics and lead to “fair” outcomes. This has long been the case and in fact is one of the principal reasons the degree of intergenerational income mobility is viewed as being policy relevant. If the tie between the adult outcomes of children and their family background is rather loose then in some sense the playing field might be thought of as level, children's position in the income distribution being the result of their own efforts rather than accidents of birth. As such, the degree of intergenerational mobility is perceived as being closely related to social inclusion and equality of opportunity, ethics that are widely accepted, often legitimize public institutions, and as a result are central to a sense of shared destiny.

In this chapter, I will formally discuss the relationship between equality of opportunity and intergenerational income mobility.