Abstract
Based on longitudinal data from the Cross-National Equivalent File 1980–2016 (CNEF 1980–2016) the paper analyzes the extent of income inequality and capability deprivation and the driving forces of the intergenerational transmission of social and economic status of two birth cohorts in Germany, and the United States. In both the countries the empirical results show increasing inequality of the real equivalent household income, and younger cohorts experience a higher persistence of social and economic status. In the United States income inequality is more expressed than in Germany, which is in accordance with lower intergenerational income mobility. The contribution of individual and family background characteristics and capability deprivation indicators to intergenerational income mobility is more pronounced in the United States than in Germany. The significant impact of capability deprivation in childhood on the intergenerational transmission of economic chances emphasizes the importance of economic and social policy designated to guarantee the equality of opportunity.
Highlights
Many industrialized countries are confronted with changing macroeconomic conditions, institutional settings of the labor markets, and the relative demand for skills which are among the explanations for the continuously increasing inequality of the earnings distributions (Jenkins 2011).Technological and demographic changes reinforce job polarization and heterogeneity of employees concerning age, gender, occupations, and industries contribute to increasing economic and social stratification jeopardizing the equality of opportunity (Acemoglu 2003, Atkinson and Piketty 2010).The link between income inequality and intergenerational economic and social mobility is complex and non-linear
Based on representative CNEF data the paper evaluates the level and extent of income inequality, capability deprivation, and intergenerational income mobility of two birth cohorts living in the parental household at the age of 10–20 years and living in their own household as adults in Germany and the United States
We started from the hypotheses that country differences concerning the existing welfare-state regime, family role patterns, institutional settings of the labor markets, and social policy design induce a different working of the individual and parental socio-economic resources on income inequality, capability deprivation, and intergenerational income mobility
Summary
Technological and demographic changes reinforce job polarization and heterogeneity of employees concerning age, gender, occupations, and industries contribute to increasing economic and social stratification jeopardizing the equality of opportunity (Acemoglu 2003, Atkinson and Piketty 2010). The link between income inequality and intergenerational economic and social mobility is complex and non-linear. Empirical research tends to show that income inequality and intergenerational mobility of the social and economic position are correlated (Friedman [1962] 2002), but the causality is ambiguous. Economic and social inequality experienced in childhood gains in importance from a perspective caring about the equality of opportunity (Smeeding and Rainwater 2004). Children growing up in low-income households only escape the poverty trap if intergenerational income mobility compensates economic and social inequality (Mayer and Lopoo 2005). The negative consequences of economically and socially disadvantaged children for the society may be considerable (Gregg and Machin 2001), because children have no personal responsibility for their own economic and social situation, and poverty in childhood often
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