Static and Dynamic Inequalities in Europe: Intergenerational Mobility and Income Inequalities

Although static inequalities and dynamic inequality have long-standing tradition in economics and social sciences, only few studies are devoted to the analysis of both dimensions simultaneously, especially in a comparative perspective. McCall and Percheski concluded recently that “the precise social and economic mechanisms underlying the relationship between income inequality and intergenerational immobility […] are not well understood, and changes over the period of rising income inequality have been difficult to estimate precisely” (2010: 339). This paper aims at contributing to this gap by testing if the so-called Great Gatsby curve from recent economic literature (Corak 2013) - displaying the macro relation of (a) income inequality for different countries by the Gini coefficient on the x axis and (b) the generational earnings elasticity, i.e. the degree to which (dis)advantages are “inherited” over generations, on the y axis - can also be applied to sociological conceptualisations of intergenerational mobility, i.e. occupational mobility. We believe moreover that mobility patterns differ for the bottom and the top of the parental income range and examine these thus separately.

Our empirical contribution lies in the comparative analysis of 20 European countries based on the most recent 2011 module on intergenerational transmission of disadvantages of the EU Survey on Income and Living Conditions (EU-SILC). In this way, we are able to construct indicators of dynamic inequality and analyzing static inequalities at the same time (shares of incomes, percentile ratios and summary statistics of inequality). Whereas the first shows the fluidity of a society reflecting the mobility over generations (intergenerational mobility), the latter shows the socio-economic inequality at a particular point of time (hierarchy). We investigate different dimensions of intergenerational mobility: the transmission of education, of occupational status/social class and of (simulated) income (ranks).