Intergenerational Transmission of Poverty in Finland in the 1990S

Abstract

The focus of this study is to investigate whether there are links between social mobility and poverty from the viewpoint of the intergenerational transmission of poverty. The context for the study is the economic crisis of the early 1990s in Finland. The study seeks answers to questions such as whether there were changes in the intergenerational transmission of poverty during the first half of the 1990s and whether the intergenerational transmission of poverty is different among men and women. In addition, the study seeks to determine whether the intergenerational transmission of poverty is different among those coming from poor and non-poor family backgrounds in the period 1990 – 1995. The data are derived from the 1970–1995 Longitudinal Census Data File of Statistics Finland. The panel, gathered every fifth year, is a register-based dataset, containing information on around 700 000 Finns. The 1960 birth cohort, who were 10 years old in 1970, and consequently 30 years old in 1990, was selected as the basis for the analysis. The results of the study indicate that poverty shows clear signs of intergenerational transmission in Finland: those coming from a poor family background have around twice as high a risk of poverty in young adulthood compared to those from a non-poor family background. However, the transmission of poverty did not change during the depression: those coming from a poor family background had the same risk of poverty before and after the depression. In addition, intergenerational transmission of poverty was quite similar among men and women.