Equality of Opportunity and the Distribution of Long-Run Income in Sweden

Equality of opportunity is an ethical goal with almost universal appeal. The interpretation taken here is that a society has achieved equality of opportunity if it is the case that what individuals accomplish, with respect to some desirable objective, is determined wholly by their choices and personal effort, rather than by circumstances beyond their control. We use data for Swedish men born between 1955 and 1967 for whom we measure the distribution of long-run income, as well as several important background circumstances, such as parental education and income, family structure and own IQ before adulthood. We address the question: in Sweden, given its present constellation of social policies and institutions, to what extent is existing income inequality due to circumstances, as opposed to 'effort'? Our results suggest that several circumstances, importantly both parental income and own IQ, are important for long-run income inequality, but that variations in individual effort account for the most part of that inequality.equality of opportunity, family background, inequality, long-run income

Intergenerational Top Income Mobility in Sweden: A Combination of Equal Opportunity and Capitalistic Dynasties

This paper presents new evidence on intergenerational income and earnings mobility in the top of the distributions. Using a large dataset of matched father-son pairs in Sweden we are able to obtain results for fractions as small as 0.1 percent of the population. Overall, mobility is lower for incomes than for earnings and it appears to decrease the higher up in the distribution one goes. In the case of incomes, however, we find that mobility decreases dramatically within the top percentile of the population. Our results suggest that Sweden, well-known for its egalitarian achievements, is a society where equality of opportunity for a large majority of wage earners coexists with capitalistic dynasties.intergenerational income mobility, top incomes, earnings inequality, income inequality, welfare state, non-linear regression, quantile regression

Intergenerational Top Income Mobility in Sweden – Capitalist Dynasties in the Land of Equal Opportunity?

This paper presents new evidence on intergenerational mobility in the top of the income and earnings distribution. Using a large dataset of matched father-son pairs in Sweden, we find that intergenerational transmission is very strong in the top, more so for income than for earnings. In the extreme top (top 0.1 percent) income transmission is remarkable with an IG elasticity above 0.9. We also study potential transmission mechanisms and find that sons’ IQ, non-cognitive skills and education are all unlikely channels in explaining this strong transmission. Within the top percentile, increases in fathers’ income are, if anything, negatively associated with these variables. Wealth, on the other hand, has a significantly positive association. Our results suggest that Sweden, known for having relatively high intergenerational mobility in general, is a society where transmission remains strong in the very top of the distribution and that wealth is the most likely channel.Intergenerational income mobility; Top incomes; Earnings inequality; Income inequality; Welfare state; Non-linear regression; Quantile regression

Intergenerational top income mobility in Sweden: Capitalist dynasties in the land of equal opportunity?

This paper presents new evidence on intergenerational mobility in the top of the income and earnings distribution. Using a large dataset of matched father-son pairs in Sweden, we find that intergenerational transmission is very strong in the top, more so for income than for earnings. In the extreme top (top 0.1 percent) income transmission is remarkable with an IG elasticity above 0.9. We also study potential transmission mechanisms and find that sons’ IQ, non-cognitive skills and education are all unlikely channels in explaining this strong transmission. Within the top percentile, increases in fathers’ income are, if anything, negatively associated with these variables. Wealth, on the other hand, has a significantly positive association. Our results suggest that Sweden, known for having relatively high intergenerational mobility in general, is a society where transmission remains strong in the very top of the distribution and that wealth is the most likely channel.Intergenerational income mobility; top incomes; earnings inequality; income inequality; welfare state; quantile regression

Intergenerational mobility of socio-economic status in comparative perspective

This paper reviews three strands of literature on socio-economic intergenerational mobility. The first is a mostly recent and rapidly growing economics literature that measures mobility in labour earnings and income. This approach is compared with two classical sociological approaches that measure the mobility in class and status. The United States seems to rank quite high in terms of class and status mobility, but low in terms of earnings and income mobility. This seemingly contradictory result can be accounted for by lower earnings mobility within occupations in the United States.

The Intergenerational Transmission of Income in Switzerland - A Comparison between Natives and Immigrants

This paper analyses the intergenerational income mobility for natives and immigrants in Switzerland. An IV approach based on data from two different data sets is used. As there is no adequate data on fathers, I revert to information from a period that differs from actual fathers’ work period. This methodological approach leads to a bias of the resulting intergenerational elasticity. Nevertheless, cross-national comparison of income mobility is still possible. A comparison across subgroups of the Swiss population shows strong differences between Swiss and immigrants. Compared to natives, immigrants are more immobile. Also, substantial heterogeneity is found across different ethnic groups. Using quantile regression, mobility for natives is found to be similar for all income quantiles. Among immigrants, mobility is higher at the lower as well as at the upper end of the income distribution. These patterns differ from previous results from other countries.Income mobility, Intergenerational transmission, Immigrants

Efficiency and Equality in the Labour Market

This paper discusses the costs and benefits of welfare state intervention in the labour market, and argues that many forms of intervention can be justified for efficiency reasons. The paper reviews recent evidence on income inequality and income mobility, and it discusses labour market reforms that may improve efficiency without violating European voters’ preference for equality.welfare state; collective bargaining; inequality; labour market reform

The economic case for an independent Scotland

This article puts forward an economic case for Scotland becoming independent. There have been many debates regarding the economic consequences of independence. This paper sets out Scotland’s economic and financial potential, and how economic prosperity and resilience are not well served by the current UK economic model of constitutional framework

Intertemporal Welfare Dynamics

human development, technology