How Much Does Your Father’s Income Matter? A Global Look at Intergenerational Mobility

A pioneering study by the World Bank’s Development Research Group and the Inter-American Development Bank has unveiled the most expansive cross-country database on intergenerational income mobility to date. Conducted by economists Ercio Munoz and Roy van der Weide, the research introduces a robust dataset encompassing 87 countries and covering 84 percent of the global population. Employing a method known as Two-Sample Two-Stage Least Squares (TSTSLS), the researchers circumvent the lack of multi-decade panel data by using two waves of household surveys taken roughly 15 to 20 years apart. These surveys provide not only income data but also retrospective information about parents’ education and occupations, variables that serve as proxies to predict parental income. This innovative approach greatly expands the range of countries included, offering a far more global and inclusive view of income mobility than previously possible.

At the center of the study is the intergenerational income elasticity (IGE), a statistic that captures how closely a child's income is tied to that of their parents. An IGE near zero suggests high mobility, where an individual's economic destiny is not predetermined by their family background. An IGE approaching one signals that parental income heavily dictates a child’s economic future. The results show dramatic variation: countries like Sweden, Norway, and Finland report IGE values as low as 0.14, while others like India and Madagascar approach 0.96. Notably, 11 of the 15 least mobile countries are in Africa, South Asia, or Latin America. Countries such as Nigeria, South Africa, Guatemala, and Colombia all show troubling levels of income persistence across generations.

Mobility Mirrors Inequality in Stark Patterns

One of the most significant findings from the study is the reaffirmation of the Great Gatsby Curve, the observed negative relationship between income inequality and income mobility. Originally established with data from a small set of high-income countries, this pattern holds up globally. Countries with low inequality, like the Nordics, also exhibit high income mobility. In contrast, nations such as South Africa and Guatemala sit at the opposite end of the spectrum, plagued by both high inequality and low mobility.

The data reveal how stark income divides between parents manifest into lasting disadvantages for their children. In countries like Brazil, Egypt, and the United States, sons of wealthier fathers can expect to earn 50–80 percent more than sons of poorer fathers. In Sweden or Denmark, that gap shrinks to less than 25 percent. These figures suggest that in many developing economies, birthright significantly overshadows individual talent or effort.

When Education Doesn’t Pay Off Equally

While education is often viewed as a ladder to better economic outcomes, the study complicates this narrative. Some countries display relatively high educational mobility but low income mobility, meaning that educational gains are not translating into equitable access to good jobs. Countries like Egypt and Tunisia, for instance, appear to deliver on schooling but not on labor market fairness. Meanwhile, Serbia and Turkey show higher income mobility than their education mobility would suggest, implying the labor market may, in some contexts, serve as an equalizer.

This distinction reveals a deeper insight: educational opportunity alone is not enough. If labor markets are captured by elite networks or riddled with informality and discrimination, even well-educated individuals from low-income backgrounds may struggle to translate qualifications into income.

National Wealth Boosts Opportunity, but Only with the Right Policies

Another compelling trend in the study is the positive correlation between income mobility and GDP per capita. As nations become wealthier, mobility tends to increase. This pattern is partly attributed to better fiscal capacity: richer countries can spend more on public goods like education, healthcare, and social protection. These investments, especially when progressive, help level the playing field.

Indeed, the study finds that countries with more progressive tax-and-transfer systems, those that reduce income disparities through redistribution, consistently demonstrate higher income mobility. Conversely, high returns to education, which might seem beneficial at first glance, are linked with lower mobility. That’s because affluent families are better positioned to capitalize on education systems that reward credentials, deepening intergenerational divides unless public systems counterbalance this effect.

Upward Mobility: A Different Perspective, A Different Story

The report also contrasts IGE with alternative indicators of upward mobility developed by economists Ray and Genicot. Their measures focus on income growth, especially among lower percentiles, and can be calculated without parental background data, making them applicable to more countries. However, these indicators yield different conclusions: they show weak or no correlation with inequality and a negative correlation with national income.

This divergence highlights the conceptual difference between IGE and upward mobility metrics. IGE captures how much of the economic advantage (or disadvantage) is passed from parent to child. Upward mobility metrics, by contrast, track the average income gains of the poor, regardless of origin. One reveals social inheritance; the other reflects poverty reduction. Together, they offer complementary but distinct views on economic progress.

In sum, this groundbreaking study provides a nuanced and data-rich portrait of how economic status is passed down around the world. It confirms that opportunity remains deeply unequal across borders, and often within them. It also underscores the role that public policy, especially redistributive taxation, education access, and labor market reform, plays in shaping a more mobile society. As the authors rightly conclude, income mobility is not a fixed feature of a country; it is shaped by choices. And for governments aspiring to equality of opportunity, this new global evidence offers both a wake-up call and a path forward.