Cross-country Differences in Intergenerational Income Mobility

Abstract

Intergenerational mobility has long been an area of interest for many economists and sociologists. In general, intergenerational mobility refers to the extent to which an individual’s socioeconomic prospects and outcomes are linked to those of his/her parents. This thesis will mainly focus on the intergenerational mobility of income and provide insights on how income levels across generations are linked to each other and how the degree of mobility differs across countries.

This literature review presents two established methods of measuring intergenerational income mobility and considers possible issues and limitations related to them. Furthermore, this thesis covers relevant literature and empirical studies regarding intergenerational income mobility from various countries. I discuss the found cross-country differences in mobility by focusing on the two extremes – the Nordic countries and Latin America. Additionally, I address possible explanations for the differences in mobility levels across regions and conclude with a discussion on policy implications.