Inequality transmission over space and time in Luxembourg

Social mobility and cohesion have been one of the key policy objectives to enhance inclusive economies and societies across many OECD countries. Policies on eradicating income inequalities and creating equal opportunities both for native-, and foreign-born population, who are now making up almost one in five people in these countries, are of particular interest for maintaining social cohesion. It is no surprise that at least at an early stage of immigration adult population face a number of challenges to adjust and progress in a foreign environment for obvious reasons such as education and native environment they were raised, one could expect that these obstacles would disappear for their children and generations as their peers born from natives.
While it is obvious that inequalities, be it among native or immigrant population, might be attributed to individual characteristics, or genetic factors, part of the inequalities that reflect factors largely out of an individual’s control—such as parents’ education, local schools, and communities—should require policy attention in order to curb income inequality.
Thus, we aim to understand how mobility gap among native and immigrant populations within individual neighbourhoods have changed over time; whether the children of foreign-born population and of natives have similar probabilities of upward mobility in terms of education, income and wellbeing across neighbourhoods within Luxembourg. In this study we would like to look at the intergenerational income and educational mobility of the children of immigrants and natives using rich administrative data from Luxembourg – a country with almost 50 percent of whose population do not have Luxembourgish nationality, and a country which has one of the highest rates of cross-border mobility.
The study will consider three sets of factors that might explain intergenerational transmission of inequality trends among native and immigrant children: (i) family-level characteristics, namely family education and family structure, (ii) childhood environment, and (iii) exogenous increase of income mix in the neighbourhood.
The analysis will be based on breaking down immigrant population and their children into country of origins which account for the largest foreign communities. Apart from presenting overview of the main characteristics of the Luxembourg immigration system and some historical and institutional context, the paper will present the results of the empirical research on the educational attainment, earnings, and wellbeing of these two population groups (native and immigrant) using EUSILC data. The data will combine variables from several registers, including education, income, and employment database. This study will involve using dataset of parents and children to study the intergenerational transmission of income and education among immigrants and natives in Luxembourg.