Occupational Mobility: Theory and Estimation for Italy

TL;DR

This paper develops a model to analyze intergenerational occupational mobility in Italy, highlighting the roles of income incentives, opportunity equality, and occupational composition changes, with empirical findings on mobility patterns over time.

Contribution

It introduces a novel model linking mobility to three determinants and uses transition matrices to measure asymmetric mobility patterns in Italy.

Findings

Children born after 1965 experienced higher overall mobility.

Income incentives significantly influenced downward mobility from upper-middle classes.

Equality of opportunity remained steady but was not perfect.

Abstract

This paper presents a model where intergenerational occupational mobility is the joint outcome of three main determinants: income incentives, equality of opportunity and changes in the composition of occupations. The model rationalizes the use of transition matrices to measure mobility, which allows for the identification of asymmetric mobility patterns and for the formulation of a specific mobility index for each determinant. Italian children born in 1940-1951 had a lower mobility with respect to those born after 1965. The steady mobility for children born after 1965, however, covers a lower structural mobility in favour of upper-middle classes and a higher downward mobility from upper-middle classes. Equality of opportunity was far from the perfection but steady for those born after 1965. Changes in income incentives instead played a major role, leading to a higher downward mobility from upper-middle classes and lower upward mobility from the lower class.