Cohort differences in intergenerational income transmission in Finland

Abstract

Major social changes such as occupational restructuring, educational expansion and increasing income inequality are likely to significantly influence the intergenerational transmission of income. The aim in this article is to investigate this question in an analysis of the transmission of low and high income in Finland in five birth cohorts born between 1956 and 1978. The focus is on the contribution of parental social class and personal educational level to this association. The analyses are based on a longitudinal register-based data set that is a representative 11-per-cent sample of the Finnish population. The level of intergenerational income transmission among those with a low- and a high-income parental background is stable among men, and is increasing slightly among women. Simultaneously, the role of achieved education as a mechanism strengthens slightly upon entry to the lowest income level, and declines upon entry to the highest level. These results indicate that despite the increasing income inequality, intergenerational transmission remains rather stable, but the mediating role of educational qualifications may have changed. Occupational restructuring seems to have no clear influence on the process.