The European value-chain analysis intergenerational income mobility in Italy it suggests a strong persistence of income between fathers and children with an elasticity of 0.456, indicating that on average a 1% variation in the father's income corresponds to a 0.456% variation in the son's income. This elasticity is a synthesis of all the factors which simultaneously influence the child's income through the father's income and which will be detailed below, with specific reference to education, sector of activity and type of occupation, factors which on the one hand represent the main channels of intergenerational income mobility, on the other hand, have further effects on social mobility more generally and therefore on inequalities.
Transition matrices are a tool for studying intergenerational mobility. In each cell they report the conditional probability that the child has a certain socio-economic characteristic given the characteristic of his father. The main diagonal therefore represents immobile individuals, i.e. those who maintain the same characteristics as their father.
The transition matrix of education level between father and children for Italy shows that the generation of children today is on average better educated than that of their fathers, following both the introduction of compulsory education and the greater investment in human capital. Furthermore, the values found on the main diagonal, especially at high levels of education, indicate that there is a strong persistence in schooling levels across generations. 51% of the children of fathers with upper secondary education achieve the same level of education and 51.7% of the children of fathers with university degrees also obtain their degree. On the other hand, the children's probability of acquiring a high level of education is significantly reduced for lower levels of education of the father.
A possible explanation for this persistence of educational profiles is represented by the propensity on the part of parents, especially among middle-upper classes, to strongly encourage and motivate their children to acquire high levels of education, also stimulating a strong aspiration for success both at an academic and professional level (Doepke and Zilibotti, 2014). Furthermore, the commitment of parents to encourage their children to ambition tends to be all the higher, the higher the income inequality in society and the higher the educational performance, because school commitment can be translate into better economic conditions and more. Conversely, in a country with low income inequality, the incentive of parents is less pronounced, due to less competition and less inequalities in income distribution.
This explanation fits well Italian case where, despite the uncertainty in the labor market which dampens the return on investment in education, pronounced income inequalities which in Italy stand at 0.321 according to the Gini Index, push Italian parents towards an active parenting style which, as the transition matrix suggests, is typical of the middle-upper class and determines a strong persistence in education levels. Persistence also reports a marked inequality of opportunity which curbs social mobility right from the start, especially to the detriment of the children of less educated fathers. Educational policies aimed at strengthening equal opportunities can activate the transition process between generations and allow education to act effectively as a social elevator.
Looking at occupational mobility, in the sector of activity 52% of children whose father worked in the industrial sector are employed in this sector and 40.6% of children whose father was employed in the public sector remain employed in the public sector. Going into the occupational profiles in greater detail, 56.7% of workers' children are workers and 34.2% of entrepreneurs' children inherited their type of occupation from their father.
La low occupational mobility between generations, which also reflects the characteristics of the Italian labor market, is influenced ex ante by the stratification of the level of education seen previously and strengthened by family networks that make employment an even more persistent socio-economic characteristic of education. The family plays a key role in the allocation of workers and this effect is made even stronger by entry barriers that limit access to certain professions.
Clearly, those presented (education, sector of activity and occupational qualification) are only some of the channels that explain the persistence of incomes between generations. Non-cognitive skills could have particular importance, for example motivation, the ability to concentrate, the ability to think about the future, personality: all very strong channels on which the role of parents is crucial. This is the so-called environmental component difficult to observe and measurable, but which however has a strong explanatory power on school-professional success and consequently on the economic condition of children (Cunha et al., 2010).
To conclude, it is evident that the distribution of these socio-economic characteristics, observable and not, has effects not only on income inequality through intergenerational income mobility, but also has more complex effects on social mobility in general, and therefore on inequalities in educational, professional, cultural and behavioral profiles.
Click here for thearticle
