Measuring the intergenerational correlation of worklessness (PDF, 420kB)
Lindsey Macmillan
This research uses the vast developments in the measurement of the intergenerational earnings mobility correlation over the past twenty years to explore the issues surrounding the measurement of the intergenerational correlation of worklessness. The correlation is estimated for a range of data sources. The role of conventional biases, measurement error and life-cycle bias, are considered in this context. An additional bias driven by local labour market conditions is introduced. For the UK, this correlation is moderate with large economic implications. Measurement error takes a different form to that commonly observed in the mobility literature but does not appear to play a substantial role in this story. In contrast to the mobility literature, life-cycle bias may not be playing a role either. Instead, there appears to be an additional bias driven by local labour market conditions at the time of measurement that should be considered when measuring intergenerational worklessness.
