From Earnings to Occupations: Understanding Intergenerational Mobility in Turkey

Abstract

The studies analyzing intergenerational economic mobility have been rather

scarce for developing countries due to unavailability of longitudinal datasets. This

study uses data from Survey of Income and Living Condition (SILC) from 2006-

2021, obtained from Turkish Statistical Institute to analyze the intergenerational

income and occupational mobility in Turkey. Besides measuring the dynamics of

income and occupational mobility across generations, we also analyze how does

the association of children socioeconomic outcome with their family background

vary at different career levels of children. Our findings reveal that the association

with parents income is much higher for daughters as compared to sons suggesting

daughters outcomes are more explained by their family socioeconomic status.

Regarding the association of children’ outcome with family status at different

career stage, the relationship is stronger when children are at the mid-career level.

The Bayesian methodology and Pseudo-panel fixed effect model has been

employed to estimate intergenerational income elasticity and for the rest of the

analysis, Bayesian methodology has been utilized. Our finding also reveals higher

intergenerational occupational persistence among children in higher income

families while children from disadvantaged families have higher probability of

switching career upon receiving good education and income perspective.

Keywords: intergenerational income/occupation mobility, inequalities, household

income, Bayesian modeling

JEL Classification : J62, D1, D3, C11

For the fair earning distribution, one’s wage should not be determined based on family background. The

studies analyzing transfers of economic outcomes across generations focuses on why inequalities exist and the

extent of it. Intergenerational economic mobility is a crucial element in the fair distribution of opportunities. Many

studies are available focused on intergenerational economic mobility and its various aspects for many countries

mostly, developed economies. However, Turkey still lacks such studies to understand the share of inequalities

caused due to the transfers of economic/social outcomes across generations.

The research targeted on the transfer of socioeconomic status across generations are to understand the

dynamics and factors affecting economic mobilities, to eradicate economic inequalities, and to promote welfare

and equality. Higher intergenerational immobility shows persistence of socio-economic status across generations

which is caused due to unequal opportunities and disproportion family resources instead of differences in

individuals’ effort and diligence: higher intergenerational economic persistence could indicate poor allocation of

human capital resources. The children coming from disadvantaged family backgrounds might perceive the odds of

being successful/ jumping up on the ladder of socio-economic class are caused against them and that could result

in the less cooperation in the society (Mogstad & Torsvik, 2023).

Intergenerational income earning elasticity (IGE) is the most frequently metric used to assess the

association between children' and fathers’ income and other economic opportunities. However, the studies using

IGE for the analysis of IGM has mostly been done for developed countries (Solon, 2002), (Chetty, Hendren, Kline,

Saez, 2014a), (Chetty, Hendren, Kline, & Saez, 2014), (Cervini-Plá, 2015), (Corak et al., 2014)). Most of this

literature targeted the developed economies; developing economies have been ignored so far mainly because of the

unavailability of the data required to examine intergenerational economic mobility and its dynamics.