Patrons, Protégés, and Peers: Workplace Mechanisms of Intergenerational Inequality

Intergenerational mobility, the extent to which individuals can achieve economic success regardless of their family background, is a key indicator of equality of opportunity. While labor market outcomes reflect both individual traits and firm-level pay-setting, research on intergenerational mobility has largely focused on the former.

In this talk, I discuss a larger project that seeks to understand the role of employers in the inheritance of economic status. In contemporary Sweden, sorting across workplaces accounts for between one-quarter (employers) and two-fifths (establishments) of the intergenerational correlation in labor earnings. Privileged workers tend to sort into firms that both generate higher value-added and distribute a larger share of surplus to employees. Although workers from less advantaged backgrounds benefit equally when employed by high-paying firms, they are much less likely to gain access to them. I quantify the roles of education, occupation, parental job networks, and the inheritance of industry, employer, and local labor market. I then conclude by outlining a broader research agenda using linked employer-employee data to systematically assess how workplace-level mechanisms shape inequality by social origin.

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