The Sources of Intergenerational Mobility in Luxembourg and the US


CALL: 2019

DOMAIN: LE - Law, Economics, Finance





HOST INSTITUTION: University of Chicago

KEYWORDS: Intergenerational mobility, inequality, income mobility, education mobility, comparative analysis of systems

START: 2019-07-10

END: 2022-07-09


Submitted Abstract

Intergenerational mobility (IGM) is the extent to which an individual’s position on the economic scale is independent of the position of her or his parents. Recent studies show (a) wide variations in IGM across and within countries, (b) stagnation or decline of IGM for a majority of EU Member States and in the US, and (c) a potential negative impact on national and global economic growth due to wasted human potential and misallocation of resources.The concept of IGM embeds the notion of equality of opportunity, which is the extent to which people’s life achievements are affected by circumstances they are born into, such as parental education and income, race, gender and birthplace. These circumstances, by interacting with policies, markets and institutions, play an important role in determining the future life prospects of individuals. In order to better understand the determinants and the multi-faceted nature of IGM, it is clear that a better knowledge of the drivers of inequality of opportunity is therefore needed. This would in turn advise policy-making.The contribution and originality of this PhD research project reside in identifying the sources of differences in IGM between Luxembourg and the USA. This will be undertaken by computing comparable estimates of IGM for both countries using newly released micro-data by the Luxembourg government. In contrasting the differential role of the welfare state on IGM in these two countries, this research will shed light on the strengths and weaknesses of Luxembourg’s generous welfare system relative to the USA, in upholding IGM, allowing to better guide the elaboration of context-specific public policies. Particularly, this research will aim to capture the interactions and potential trade-offs between social influences, family circumstances, and public policies (including education and labor market policies and tax progressivity) in fostering greater mobility.

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