Parents' education ‘has greater effect’ in unequal countries

Earnings gap greater in UK and US, suggests Institute of Education research

October 31, 2014

English men who were born to parents educated to a low level earn 20 per cent less on average than the sons of graduates, even when they have degrees themselves, researchers say.

A new report from the Institute of Education, which looked at 40,000 males aged 25 to 59 in 24 countries, reveals striking examples of how inequality can be transmitted from one generation to the next.

Analysis by John Jerrim and Lindsay Macmillan of the Institute’s department of quantitative and social science finds that the effect is particularly marked in countries which are more economically unequal.

Based on data gathered by the Programme for the International Assessment of Adult Competencies, the report says there is a strong overall correlation between parental education and their children’s earnings in all the countries considered.

The offspring earnings gap between parents with high and low education backgrounds is approximately 20 per cent or less in countries such as Finland, Sweden, Norway and Denmark, all relatively equal countries, whereas in more unequal countries it is much higher – 51 per cent in England and Northern Ireland and 75 per cent in the US.

Once someone’s own education is taken into account, the correlation between parental education and earnings becomes small and statistically insignificant in several countries, including the Scandinavian nations plus Austria, Germany, Belgium and the Netherlands.

However, the direct effect of parental education remains significant in other countries, with people whose parents were educated to a low level earning 20 per cent less than those whose parents were highly educated in France, Japan and South Korea, as well as England and Northern Ireland.

Although the study focused on men, a secondary analysis of women’s incomes showed that those in England and Northern Ireland born to parents who were early school-leavers earn 11 per cent less than the daughters of graduates, even if they have the same qualifications.

Considering to what extent a parent’s educational attainment was linked to that of their offspring, the researchers found similar variation.

For example, Swedes whose parents were from higher education backgrounds were four times more likely to graduate from university than people with lower parental education backgrounds.

However, in England and Northern Ireland, people who had at least one graduate parent were around eight times more likely to have a degree themselves.

Dr Jerrim said statistics were unavailable for Wales and Scotland because they did not participate in PIAAC.

“The UK may offer particularly high economic rewards for going to a ‘good’ university, whereas, in other countries, ‘a degree is a degree’. As children from advantaged backgrounds tend to go to more highly-ranked universities in this country, this could help to explain our results,” said Dr Jerrim.

“It is also reasonable to assume that the sons and daughters of families with greater financial resources may be given more time to find a suitable job than those from less advantaged backgrounds.”

Dr Jerrim added that it would be interesting to see whether the growth of unpaid internships as being part of the career ladder would “skew incomes even further in favour of those with graduate parents”.

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