The relationship between intergenerational mobility and equality of opportunity

Abstract

Among economists, the analysis of social mobility and the role of parental background is largely carried out in two separate strands of research. The intergenerational mobility literature estimates parent–child persistence in some outcome of interest, such as income. In contrast, the equality of opportunity literature is rooted in a normative framework, and has only more recently started generating empirical evidence. Intergenerational mobility regressions are relatively straightforward to estimate, but their normative implications are less obvious. Measures of equality of opportunity have a policy‐relevant interpretation, but are very data‐demanding, requiring a large set of observable determinants of socioeconomic status for large samples. But maybe the two approaches capture similar dynamics? We compare the approaches by estimating both equality of opportunity and intergenerational mobility measures – as well as sibling correlations – across 16 birth cohorts and 126 Swedish local labor markets. Using these estimates, we find that the different measures correlate strongly, suggesting that (variation in) intergenerational mobility is indeed informative about equality of opportunity.