A person's income is heavily influenced by the amount of time that their parents invested in their learning as a young child. This key finding from research by the School of Economics’ Uta Bolt and co-authors was published recently by the University of Bristol.
The study reinforces to policymakers that children need an enriching early years’ environment to enhance their future earning potential, and to overcome slow progress in social mobility.
The stickiness of income from one generation to the next
Social mobility in the UK is lower than in many other advanced economies, including France, Germany, Canada and, especially, Scandinavian countries. Children with rich parents are likely to become high earners themselves, while children from low-income families often remain trapped in a cycle of poverty.
Why is this? Bolt and her collaborators investigated the root causes of this cross-generational persistence in income, focusing on six potential influences in childhood:
- Educational attainment – the number of years spent in education.
- Cognitive skills – judged by maths and reading ability, assessed at ages 7,11 and 16 in this study.
- Non-cognitive skills – concerning behaviour and mental health factors, like aggression and depression.
- Parental time investment – the time parents spend reading to their children, taking them on outings, and showing interest in their education.
- School quality – teacher-student ratios, the share of students taking qualifications, and overall school completion rates.
- Family background – the number of siblings and parents’ education.
The research team measured the strength of each of these influences on earnings until the age of 55, and how they reinforce one another.
The study was enabled by data from the UK’s National Child Development Study (NCDS). This huge, ongoing survey tracks the lives of every person born in one particular week of 1958 in Britain.
“This dataset is incredibly unique,” explains Bolt. “It allows us to examine a single, large group in immense detail – their family life, education, skills and careers. This gives us powerful evidence that shows how childhood factors affect future income and social mobility."
What is the biggest driver of social mobility?
The study found that the six factors combined explain the majority of Britain’s intergenerational earnings elasticity (IGE). This key metric effectively measures social immobility by capturing the persistence of income across two generations. A high IGE indicates low social mobility in a society.
The six childhood influences accounted for 68% of women’s IGE and 55% of men’s.
But the most important driver of a child’s lifetime earnings, by far, was parental time investments from a young age. This explained 24% of women’s IGE, and 28% of men’s.
The study reveals, precisely, how these time investments have a domino effect that amplifies as the child grows older.
“Our analysis shows that time investments, like reading and family outings, support a young child’s cognitive skills, particularly numeracy and literacy. These skills help them do well at school,” Bolt explains. “In turn, the child spends more years in education, including further and higher education, which then allows them to earn higher wages.”
Both rich and poor children benefited from the cascading effects of their parents’ time. But richer parents were more likely to spend time on their children’s learning, the study finds, which perpetuated the persistence of income across generations.
For example, 56% of the richest mothers and 42% of the richest fathers read to their 7-year-old children every week. This compares with 50% of the poorest mothers and 37% of the poorest fathers.
Lessons for policy: the early years really do matter
The findings provide further strong evidence that early childhood experiences are crucial to social mobility.
“Not only is social immobility perceived as unfair, we also know from wider research that socially immobile societies are more unequal, and that inequality creates social friction,” Bolt says.
“Our results help policymakers understand where they need to intervene to improve social mobility. Our study, and others, show that a focus on early years will have a bigger impact than interventions in later childhood and adulthood.”
Bolt adds: “some people might look at our results and conclude that social mobility is solely down to parenting.” But she refutes this argument: “Large time investments are always going to be harder for some families than others.
"By understanding how critical the early years are, the government can create more equal opportunities for children from all backgrounds by providing high-quality childcare and supporting families with young children, for example.”