Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality

Family income is found to be more closely related to sons' earnings for those born in 1970 compared to those born in 1958. This result is in stark contrast to the finding on the basis of social class; intergenerational mobility for this outcome is found to be unchanged. We set up a formal framework which relates mobility in measured family income/earnings to mobility in social class. Building on this framework we then test a number of hypotheses to explain the difference between the trends. We reject Erikson and Goldthorpe’s (2009) assertion that the divergent results are driven by the poorer measure of permanent family income in the 1958. Instead we find evidence of an increase in the intergenerational persistence of the permanent component of income that is unrelated to social class.