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During the 1990s, a number of countries in both North America and Europe set explicit targets for the reduction of child poverty, including the United Kingdom, Ireland, and Canada. In the United Kingdom, the pledge, announced in 1999, was to eliminate child poverty in a generation; in Canada, the ambition, made clear a decade earlier, was to seek to do the same by the year 2000. And even in countries less explicit about their goals, reducing child poverty has been an important public policy concern. This, for example, is as true in the United States, where child poverty rates have historically been among the highest relative to other rich countries, as it is in Sweden, where they have been among the lowest. Clearly, this issue has a strong resonance in public policy discourse, and reflects a growing concern over the welfare of all children regardless of their place in the income distribution. But why should societies care more about children than any other group? One possible reason is that children have certain rights as citizens, but are dependent upon others for the defense of their rights. This may certainly be the case, but another reason – one often explicitly made by advocates – is instrumental: children should be thought of as investments in the future. This argument suggests that in the long run the productivity of the economy and the well-being of all citizens would be higher if the well-being of children were improved, and in particular if child poverty were reduced.
Labour markets in North America and Europe have changed tremendously in the face of increased globalisation and technical progress, raising important challenges for policy makers concerned with equality of opportunity. This book examines the influence of both changes in income inequality and of social policies on the degree to which economic advantage is passed on between parents and children in the rich countries. Standard theoretical models of generational dynamics are extended to examine generational income and earnings mobility over time and across space. Over twenty contributors from North America and Europe offer comparable estimates of the degree of mobility, changes in mobility, and the impact of government policy. In so doing, they strengthen the analytical tool kit used in the study of generational mobility, and offer insights for research and directions in dealing with equality of opportunity and child poverty.
This volume contains twelve essays from twenty-three collaborators, and spans – to varying degrees – ten countries in North America and Europe, as well as touching upon the experience of a further five with lower levels of per capita income. It grew out of a substantive concern with the need for internationally comparable results in the analysis of generational income mobility. The early 1990s witnessed a number of data and methodological developments that revitalized research on this topic in labor economics, and which began to complement a long-standing literature in sociology. As more and more studies of the relationship between parental income and the adult labor market success of children became available, concerns about the comparability of the findings both within and across countries began to be expressed. The idea for this volume springs from this concern, and it is intended to present the major findings and methods to researchers in the area but also to a broader audience concerned with mobility across the generations from both a research and policy perspective.
The initial idea and planning for the project sprang from conversations between Anders Björklund, Marco Francesconi, Susan Mayer, and myself. I am, in the first instance, grateful for their collaboration and to the former Canadian International Labour Network for supporting the initial planning by sponsoring our participation at one of its conferences.
Miles Corak, Director of family and labour studies Statistics Canada; Research fellow of the institute for the Study Labor (IZA), Bonn, Germany,
Björn Gustafsson, Professor at the Department of Social Work Göoteborg University, Sweden,
Torun Österberg, Affiliated with the Department of Social Work Göoteborg University, Sweden
The objective of this chapter is to examine the extent to which an individual's use of unemployment insurance (UI) as a young adult is influenced by having had a parent who also collected UI. There are a number of competing – but not mutually exclusive – explanations for an intergenerational correlation in the receipt of social programs. These include the intergenerational transmission of information about how programs work, or more generally learning and the formation of habits. But, as Chapter 10 suggests, a major methodological challenge in documenting a causal intergenerational link involves determining the extent to which any observed patterns are due to intergenerational correlation of incomes, occupations, or other (potentially unobservable) factors common to parents and children that influence long-term labor market success. If these factors cannot be controlled for, there is a risk of overstating the causal impact of parental activities on the adult outcomes of their children.
The research summarized in this chapter fits into a number of related literatures dealing with intergenerational dynamics. These are discussed in more detail in the next section in the context of a schematic overview of the analysis. The empirical work is based upon longitudinal administrative data associated with the Canadian and Swedish income tax systems that have been linked intergenerationally, and focuses on the pattern of UI use by a cohort of young men and how it relates to the UI use of their fathers.
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