Thursday, 11 April 2013

Has social mobility declined since Thatcher became prime minister?

The author of this article about Thatcher's legacy concludes--among other things--that social mobility in Britain has declined since Thatcher became prime minister. He does so on the basis of a very widely cited paper, namely Changes in Intergenerational Mobility in Britain by Blanden et al. This study analysed data from two cohort surveys: the NCDS, which interviews all children born in Britain during a particular week in 1958; and the BCS, which interviews all children born in Britain during a particular week in 1970. It found that parents' earnings quartile was a better predictor of children's earnings quartile in the 1970 cohort than in the 1958 cohort.

Notwithstanding the popularity of this paper, its chief finding has been contradicted by subsequent research. In a paper titled Has Social Mobility in Britain Decreased? Reconciling Divergent Findings on Income and Class Mobility, Erikson and Goldthorpe point out that Blanden et al.'s study possesses a number of methodological weaknesses. First, due to poor quality data on self-employed individuals' incomes, some cases had to be excluded from the analysis. Second, Blanden et al. had to utilise one measure of parents' earnings when analysing the NCDS and another when analysing the BCS (the NCDS does not contain a variable for total family income at child's age 16, whereas the BCS does). Third, and most importantly, the authors had to rely on one-shot measures of parents' and children's earnings. One-shot measures of earnings are known to be quite poor measures of permanent income because they pick up transitory shocks that are uncorrelated with permanent income. Indeed, estimates of intergenerational earnings elasticity vary considerably depending on the number of years over which parents' and children's earnings are averaged; the more years, the higher the elasticity. Erikson and Goldthorpe argue that Blanden et al. observed a decrease in mobility between the two time-periods not because mobility actually decreased but because the transitory component of measured income decreased.

Rather than employing one-shot measures of earnings as indicators of social position, Erikson and Goldthorpe recommend employing social class, which is generally not subject to measurement error due to transitory shocks. In this spirit, they re-analysed the NCDS and the BCS by first assembling mobility tables based around parents' and children's respective social classes, and then fitting a number of log-linear models to them. In particular, they fitted an independence model, which postulates that there is no association between parents' class and children's class in either time period; a constant social fluidity model, which postulates that there is an association between parents' class and children's class but it does not vary between the two time-periods; and a uniform difference model, which postulates that the non-zero association between parents' class and children's class varies between the two time-periods. Erikson and Goldthorpe rejected the independence model, but found that the uniform difference model did not significantly improve upon the fit of the constant social fluidity model. In other words, the association between parents' class and children's class was not higher in the later time period than in the earlier one.

Goldthorpe and Mills, in a paper titled Trends in Intergenerational Class Mobility in Modern Britain: Evidence from National Surveys, 1972-2005, reached the same conclusion as Erikson and Goldthorpe. And so did Goldthorpe and Jackson, in a paper titled Intergenerational Class Mobility in Britain: Political Concerns and Empirical Findings. Moreover, in a working paper titled Has Social Mobility in Britain Declined? New Findings From Cross-cohort Analyses, Bukodi et al. find evidence that social class mobility in Britain has increased over the last few decades, at least for women.

1 comment:

  1. It's also worth noting that an decrease in social mobility could be caused by increasing economic specialization: the association of IQ and conscientiousness with salary could plausibly have increased with greater information technology utilization. This would lead to a greater stratification of social class along the lines of heritable psychological trait values.