Like (grand)parent, like child? Multigenerational mobility across the EU

Abstract

This study shows that the multigenerational transmission of inequality in most of the 28 EU countries is higher than what a parent-to-child paradigm would suggest. While a strand of the literature claims that this is due to a direct grandparental effect, economic historian Gregory Clark argues that multigenerational mobility follows a Markovian process. In his view, not only are previous estimates (severely) attenuated by an errors-in-variables problem, but persistence is also constant across time and space. Using a unique retrospective survey containing information on three generations of European citizens, we provide suggestive evidence against such a “universal law of mobility”. While estimates based on measurement error models show that persistence is indeed as strong as Clark suggests, there are cross-country differences. Furthermore, for a few EU countries, we cannot reject the hypothesis of a direct grandparental effect. Overall, there is no single data-generating process to describe multigenerational persistence that fits all EU countries.