The intergenerational transmission of economic inequality : extent, determinants and policy responses – TRANS-INEQ

Recent research has revealed the strong intergenerational correlation of income and other economic outcomes in developed and developing countries. A wide array of phenomena is likely to account for the intergenerational transmission of economic status, as discussed in many areas of the social sciences : primary socialization, role models, expectations and preferences, social capital, to name just a few. Economic analysis also emphasizes the role of resource constraints in the accumulation of human capital. Understanding what determinants drive the intergenerational transmission of socio-economic status appears crucial in many respects. Not only for our understanding of the dynamics of inequality in modern societies by also for the design efficient remedial policies that are able to promote equality of opportunity. Better knowledge of the influence of social policies on the intergenerational transmission of economic inequality is also required. To address these issues, this research program advances two main research directions. First, it develops the analysis of the extent and determinants of the intergenerational transmission of economic status, in particular labour market outcomes (earnings, employment) and educational attainment. Second, it examines the efficiency of schooling policies in reducing the intergenerational transmission of inequality. The analysis will be empirical, quantitative, and will resort to econometric techniques to exploit micro-economic data. However, this analysis is firmly rooted in modern theoretical models of household behaviour. The primary emphasis is on the French case but the program also includes a comparative assessment of several aspects of intergenerational mobility, in developed and developing countries. In the first part of this research project, we will provide a richer characterization of the extent and determinants of intergenerational economic mobility. To do so we offer three significant extensions of the empirical framework usually applied in empirical work. First, we will examine trends in intergenerational economic mobility over the last 50 years and examine the influence, on the intergenerational transmission of earnings, of macro variables such as the overall earnings inequality, the degree educational mobility and the returns to education. Second, while most analysis of intergenerational mobility are usually confined to the study of two consecutive generations, we will make use of data on grand-parents' socio-economic status to analyse long-run intergenerational mobility over three generations to provide a richer account of the dynamics of inequality across generations. Third, we will examine the influence, on individual economic outcomes, of several family characteristics such as maternal input, family size or family human capital along with family income. Special attention will be paid to the identification of the causal impact of these various aspects of family background. This research, which will extend our understandings of the determinants of mobility in France will be supplemented by an original analysis of economic mobility in Japan, a country so far absent from international comparisons. In the second part of this research project, we will assess the efficiency of educational policy in fostering equality of opportunity. To this end, we will concentrate on three aspects of educational systems. First, we will examine how educational systems can mitigate the influence of a disadvantaged family background, through its impact on the degree of social segregation across schools and via the allocation of educational inputs. This analysis will be undertaken in an international perspective, will focus on inequality of educational achievement, as measured by results to test scores and will require the estimation of education production functions. Second we will turn to individual educational career in order to identify the dynamics that lead to the emergence of educational inequality. We will examine the dynamics of individual achievement, evaluate the dynamic impact of grade transitions and repetitions and compare these dynamics across students who differ in terms of the characteristics of their family background. Last, we will question the efficiency of early remedial intervention, under the form of pre-school enrollment, at alleviating the detrimental influence of coming from a disadvantaged family background and promoting equal life chances. This research program will be conducted by a small research group, including a majority of young researchers, over a period of three years.