Using data from four surveys over a 40 year period, Andrew Leigh’s latest paper (pdf) argues that father-son intergenerational mobiliity is stable in Australia.
In his conclusion, as reported by The Australian, he says:
“On one view, the absence of any significant rise in inter-generational mobility might be regarded as surprising,” Dr Leigh says in the study report.
“Increases in healthcare coverage, the banning of racial discrimination, the abolition of up-front university tuition fees and an increase in the number of university places are among the policy reforms that might have been expected to increase inter-generational mobility.
“Yet there were also trends in the opposite direction.” These included rising unemployment during the study period and the removal of inheritance taxes in 1979. Dr Leigh said a rise in inequality had been well-documented with the distance between income groups greater in the early 2000s than in the mid-1960s.
I know conclusions are where they let academics off the referee’s leash, but some of this seems a bit odd to me. I’m not sure why improved healthcare coverage would make much difference; in any case claimed ‘disability’ is much higher than it used to be. Nor are bans on racial discrimination likely to have influenced the figures much; such laws are easily evaded and many migrant groups were doing fine long before discrimination was outlawed.
Inheritance taxes, as Andrew L’s own research shows (pdf), took only about 30% of the largest estates – something unlikely to affect the salary data he’s using (though it may affect investment income). And rising inequality is consistent with high mobility (if the poor and the rich swapped places each generation, ie complete mobility, inequality would be unchanged because it is a static, snapshot-in-time measure).
As we have discussed recently, the Whitlam university reforms problem had little or no overall effect on mobility (despite the cherished anecdotes of some commenters and the PM). But I am pretty sure that, contrary to what Andrew L suggests, the later increase in places did have a positive impact. The data show a significant increase in the proportion of young people from working class backgrounds going to university, and good number of them have surely made it into much better jobs than their parents had.
So why isn’t it showing in Andrew L’s figures? I think it is at least partly because he is looking at sons, when most of the expansion in university places has gone to daughters. Women have been a majority of university students since 1987, and the consequences are showing up in the workforce. The 2006 census found that over the previous decade the number of female professionals increased by 44%, while male professionals increased by only 28%; for managers women increased their employment more than twice as quickly as men: 25% to 11%.
Many of the jobs working class guys took to advance themselves in the 1960s would now be taken by women who did better at school and have superior social skills. Compounding the problem, jobs requiring physical strength have declined relative to total employment, so some of these guys cannot even maintain their father’s occupational status. They end up unemployed or ‘disabled’. If all these factors are at play, stable father-son mobility is an excellent result.