Inter-cohort differences in income over the life course

This is the authors' abstract. We don't add key points for this paper.

Income trajectories have diverged across birth cohorts in many Western countries, indicating that changing structural conditions may have altered income development over time. However, it is not well understood how inter-cohort variations in social and economic factors—such as education, labor markets, and welfare transfers—have shaped opportunities and constraints, contributing to inter-cohort income differences. Using total-population registers for Finland (birth cohorts 1920–1989) and multilevel growth-curve models, we analyze how much total income inequality in the total population is related to inter-cohort income differences. Further, we observe which socioeconomic factors contribute to income trajectories across cohorts and in which life course stage(s) these factors are most influential. We find that cohort membership explains a substantial share of population income inequality (26% for women and 9% for men). Education explains the largest share of cohort income differences, particularly in early and mid-career, while occupational class becomes more important later in the life course. Cohort income differences increase when considering differences in unemployment between cohorts, especially among men. Income transfers play a small role for women during child-rearing ages, and almost none for men. The study shows that birth cohorts remain an important source of income inequality across the life course.