Social Class, Family Background and Intergenerational Mobility

This research examines the various approaches taken by economists and sociologists for analyzing intergenerational mobility. Social mobility models based on social classes arising from an occupational classification scheme are analyzed. A test for the statistical validity of classification schemes is proposed and tested using Danish sample survey data that was first collected in 1976 and augmented in 2000. This is referred to as a homogeneity test and is a likelihood ratio test of a set of linear restrictions which define social classes. For Denmark it is shown that this test fails for an Erikson-Goldthorpe classification system, raising doubts about the statistical validity of occupational classification systems in general. We also estimate regression models of occupational earnings, household earnings, and educational attainment using family background variables as covariates controlling for unobservables, measurement error, and simultaneous equation bias. In these models homogeneity tests are also rejected. We conclude from these results that it is the respondent's family background that has a small but significant impact on lifetime chances, whereas the social class of the respondent's parents does not.