The Intergenerational Mobility Paradox in a Dual Education System
with Franziska Disslbacher, Wolfgang Frimmel, Martin Halla, Alice Kügler, Qin Lin, Harald Oberhofer, and Anna Schwarz
Education is often treated as the key channel for intergenerational income mobility. Combining administrative social security, tax, and education registers, we document a striking mobility paradox in Austria: exceptionally high income mobility, with a rank-rank slope of about 0.10, coexists with low educational mobility, with an intergenerational correlation in years of schooling of 0.42. We show that vocational apprenticeships are a key driver of this paradox. Apprenticeships are disproportionately taken up by children from lower- and middle-income families, yet they lead to relatively high earnings, so that income distributions overlap substantially across education levels, particularly between apprenticeship and tertiary graduates. In addition, earnings vary widely across fields within educational tracks, and children of tertiary-educated parents tend to sort into lower-paying tertiary fields, further weakening the link between educational and income mobility.