Swapnil Landge, a Ph.D. candidate in economics at the Graduate Center and a Stone Center Junior Scholar, researches questions related to intergenerational occupational mobility, earnings inequality, labor economics, and applied microeconomics. He is the author of two working papers that investigate intangible aspects of intergenerational occupational mobility, such as the tendency of individuals to follow the occupations of their parents, and the effect this has on earnings inequality. Landge recently presented his work at the 2nd III/LIS Comparative Economic Inequality Conference in Luxembourg and as part of the Stone Center Multidisciplinary Seminar Series.
Before starting his Ph.D., Landge worked as a project manager for a multinational organization. Stone Center Senior Scholar Miles Corak, whose work has investigated the connection between intergenerational mobility and inequality, serves as Landge’s advisor at the Graduate Center.
Landge recently spoke to the Stone Center about his research goals, his interest in inequality, and what led him to investigate the intangible transfers of skills between parents and children.
What is the focus of your two recent papers?
Landge: The papers fall within the category of intergenerational mobility literature. My papers are the amalgamation of labor economics and earnings inequality, plus some sociology, and they specifically focus on intergenerational occupational mobility.
So, what is intergenerational mobility? Basically, it’s the relationship between your standing — in terms of socioeconomic status, wages, education, or occupation — compared to your parents’ standing or that of earlier generations.
My papers are on intergenerational occupational mobility; they examine an individual’s career path in relation to their parents’ occupations. This analysis predicts the probability of an individual either following, or not following, a parent’s occupation. Each individual’s occupation is compared with both of their parents’ occupations: if it matches the mother’s occupation, the individual is classified as following the mother’s occupation; and if it matches the father’s occupation, they are classified as following the father’s occupation. And if it matches neither, they are classified as not following either parent’s occupation. By assessing these probabilities, the study identifies instances of negative self-selection, in which individuals who follow their parent’s occupation may have had better economic outcomes in an alternative career path.
When a society has low mobility, more children follow in their parents’ footsteps, compared with a society with high intergenerational mobility. And research shows that when a society has low mobility, it tends to have higher inequality.
My interest, more generally, is in labor economics. That’s why my papers talk about occupations and earnings. I’m trying to figure out the mechanism behind earnings inequality. One of the mechanisms, the literature says, is low intergenerational mobility. But most of this literature is focused on the tangible transmissions between parent and child.
By tangible transmissions, I mean transfers of wealth, of education, of housing: these are tangible things. You can track how much a parent has spent on their child’s education. You can track transfers of assets. My work is about the intangibles. I developed a model that examines how a parent’s occupation influences their child’s skills, which in turn affects their decision to follow or not follow their parent’s career path. The model further evaluates whether those who choose to follow their parent’s occupation exhibit positive or negative self-selection, based on their potential economic outcomes in alternative occupations.
For example, let’s imagine that my father was a plumber. Just by my experience of living with him, I developed skills in plumbing more than other occupational skills. I can fix a leaking water tap better than I can troubleshoot and repair my car’s faulty fuel injection system. The argument is that an individual’s skills are influenced highly by their parents’ occupations. I’m making an assumption that every individual receives an intangible transmission of some set of skills, and that this set of skills corresponds to an occupation.
What made you want to try to solve that problem?
Landge: What attracted me to solve this problem is the core of all this literature: earnings inequality. As an example, let’s take the United States, where we see a high level of inequality between the bottom and the top. This earnings inequality is an outcome. What is the mechanism driving this outcome?
One of the mechanisms is intergenerational mobility. There’s what is called the persistence of inequality, which means that if your parents were poor, you will be poor. There is a relationship. That was what made me investigate the mechanism behind earnings inequality through the angle of how occupations are transferred.
There are two types of people who follow their parents’ occupation. One set is doing well by following their parents: they do better by having the same occupation as their parents than they would have in any other occupation. And the other set could have done better in another occupation. But in a society with low mobility, barriers are stopping this second set from moving to better occupations. One question I’m looking at is: What percentage of people who follow their parents’ occupations are negatively self-selected? Negatively self-selection means that they could have done better in other occupations, but because of some barrier, they followed their parents’ occupations.
And what drew you to this specific aspect of mobility: the transfer of occupations?
Landge: The answer to that question is twofold. One personal reason is that I’m from India. In India’s history, there was the caste system of class divisions, and at its core was the choice of occupations. Only the top class could get the best jobs, the best occupations. Members of the top class could teach, they could be priests, they could be doctors. In the second class there was the second set of occupations: they could be warriors, for example. In the third, the occupations related to business. Members of the fourth or the bottom class could do only the dirty jobs.
And if a child was born to parents in the fourth class, they were stuck with those occupations. There was no mobility. They had to follow their parents’ occupations. Discrimination based on caste system is illegal but its consequences are still felt, and that is one part of what drove me to this research.
But the second part is that I’ve always been interested in earnings inequality, and I wanted to investigate a mechanism behind earnings inequality about which not much research has been done. Most research on intergenerational mobility is focused on earnings and wealth, which involve tangible transfers. There wasn’t much on intangible influences. I found this niche and I created a model to investigate it.
How did you first became interested in inequality studies in general?
Landge: When I started my Ph.D., I wanted to do research on labor economics and on some industrial organization topics, because I’d worked for a lot of corporations. But I’d been seeing more and more literature on earnings inequality. And I took Professor Miles Corak’s course on intergenerational mobility, and that gave me a chance to read more papers, and write some papers with him. And my curiosity about this subject kept rising.
There’s a lot of research on earnings inequality, but it’s actually a fairly new topic. And there’s a lot of scope of ideas to explore in this topic. And I thought, let’s see if I can try to figure out a new mechanism behind these outcomes.