Like father like son: how unemployment in one generation turns up again in the next
I’ve written loads here about the why the government should move to a more balanced anti-poverty strategy, based on tackling the causes of poverty, rather than treating the symptoms with benefits.
Unemployment, family breakdown, low educational achievement and low income are all linked to one another, and they are all important factors in poverty and social mobility. Higher unemployment might mean more family breakdown. Better education might mean lower unemployment when children grow up, and so on. All bad things tend to go together.
They all link generations too. Unemployment, low education and family breakdown all transfer from one generation to the next.
Obviously these are all important problems. But where is the best place to start picking away at this horrible knot of issues? How big a dent might different sorts of policies make in this problems?
Unfortunately, evidence on how problems in one generation lead to problems in another is a bit sketchy. So it is difficult for politicians to know what to do (and so they often have to make decisions based on their hunches instead).
But the evidence is getting better.
For example, I’ve just read a great paper on intergenerational worklessness by Lindsey Macmillan.
She uses some longitudinal studies to track whether men whose fathers were unemployed are more likely to be unemployed themselves. Even controlling for the local rate of unemployment, there is a link:
“There is a moderate significant correlation in spells out of work across generations with large economic implications. A son with a workless father is likely to experience between 8-11% more time out of work themselves between 16 and 23. In addition, they are 15-18% more likely to spend a year or more out of work in the same period. This increases to 20-25% when the period that the son is observed for is increased to 16 to 29.”
So sons of unemployed fathers are up to 25% more lively to be unemployed for a year than the sons of working fathers. And where unemployment is higher, the relationship seems to be stronger.
The graphs below show the relationship between fathers’ and sons’ unemployment: one for children born in 1958 and another group born in 1970. The top one shows the two lined up so that you can look at the ’58 and ’70 children at the same time in their lives, while the second is in in real years.
It would be good to understand this link better, and to understand what might break it. In the meantime, it is worth reflecting if being unemployed is correlated with your children being unemployed, increasing spending on benefits for unemployed parents isn’t necessarily going to prevent their children ending up in poverty. But action to reduce unemployment could yields dividends far into the future.