Intergenerational Transmission of Poverty in Finland in the 1990S
| Author | Mikko Niemelä,Pasi Moisio,Ilpo Airio |
| DOI | 10.1177/138826270500700304 |
| Published date | 01 September 2005 |
| Date | 01 September 2005 |
| Subject Matter | Article |
1º
INTERGENERATIONAL TRANSMISSION OF
POVERTY IN FINLAND IN THE 1990S
ILPO AIRIO, PASI MOISIO and MIKKO NIEMELA¨*
Abstract
The focus of this study is to investigate whether there are links between social mobility
and poverty from the viewpoint of the intergenerational transmission of poverty. The
context for the study is the economic crisis of the early 1990s in Finland. The study seeks
answers to questions such as whether there were changes in the intergenerational
transmission of poverty during the first half of the 1990s and whether the
intergenerational transmission of poverty is different among men and women. In
addition, the study seeks to determine whether the intergenerational transmission of
poverty is different among those coming from poor and non-poor family backgrounds
in the period 1990 - 1995.
The data are derived from the 1970–1995 Longitudinal Census Data File of
Statistics Finland. The panel, gathered every fifth year, is a register-based dataset,
containing information on around 700 000 Finns. The 1960 birth cohort, who were 10
years old in 1970, and consequently 30 years old in 1990, was selected as the basis for
the analysis.
The results of the study indicate that poverty shows clear signs of intergenerational
transmission in Finland: those coming from a poor family background have around
twice as high a risk of poverty in young adulthood compared to those from a non-poor
family background. However, the transmission of poverty did not change during the
depression: those coming from a poor family background had the same risk of poverty
before and after the depression. In addition, intergenerational transmission of poverty
was quite similar among men and women.
*
Ilpo Airio is a Researcher in the Department of Social Policy, University of Turku, Turku, FIN-20014,
Finland; E-mail: ilpo.airio@utu.fi. Dr. Pasi Moisio is a Researcher with the National Research and
Development Centre of Welfare and Health, Helsinki, FIN-00053, Finland; E-mail: pasi.moi-
sio@stakes.fi. Dr. Mikko Niemela¨ is a Research Fellow in the Department of Social Policy, University
of Turku, Turku, FIN-20014, Finland; E-mail: mikko.niemela@utu.fi.
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1.
INTRODUCTION
The alleviation of poverty can be justified by referring either to equality of outcome or
to equality of opportunity or to both. Alleviating poverty and other social inequalities
in outcomes are the first priorities of modern welfare states (Ringen, 1987). This role
applies particularly to income transfer systems but also to social services, which have
an important role in Nordic welfare states (e.g Titmuss, 1974; Esping-Andersen and
Korpi, 1987). However, there is an ongoing debate on how much inequality in
outcomes should be reduced without jeopardising incentives and fairness in the
distribution of efforts and rewards. In contrast, there is a broad consensus about
equality of opportunity, which is one of the leading normative goals in western
industrialised countries. This is perhaps because equality of opportunity can be
justified both by moral arguments and by referring to the efficiency of production and
aggregated goods.
Child poverty can be seen as a phenomenon where inequality of opportunity is
most explicitly and openly displayed (see e.g. Bradbury et al., 2001). Children cannot
be held responsible for the conditions into which they are born, but these conditions
can have a huge impact on the opportunities they will have in their lives. Thus child
poverty is not just a question of inequality of conditions, i.e. that some families are
worse off, but is also a question of intergenerational inequality, i.e. of inequality of
opportunity. A poor family often passes on to its children poorer opportunities in life.
How well a welfare state can prevent that poverty from being passed on from one
generation to the next can be seen as an indicator of how successful that welfare state is
in alleviating inequality of opportunity.
Intergenerational mobility between social classes and positions has been of great
interest to researchers for a long time (e.g. Lipset and Bendix, 1959; Blau and Duncan,
1967; Becker and Tomes, 1986; Erikson and Goldthorpe, 1992). The focus of this
article is to investigate intergenerational mobility between two distinctive social
groups: poor and non-poor families. In other words, the aim is to study the
intergenerational transmission of poverty. Intergenerational transmission of poverty
has been the focus of much interest particularly in the United States (e.g. Hill and
Duncan, 1987; Wilson, 1987; Duncan and Brooks-Gunn, 1997; Duncan et al., 1998;
but also e.g. Stenberg, 2000). However, the intergenerational aspects of poverty have
not been as popular a field of study in Europe.
This study tries to fill this lack of knowledge at least in relation to Finland. The
study considers whether those coming from a poor family background have a higher
risk of poverty in their adulthood. It also questions whether there were changes in the
intergenerational transmission of poverty during the first half of the 1990s when
Finland went through a deep depression (see Kalela et al., 2001) and whether the
intergenerational transmission of poverty is different among men and women.
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Intersentia
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Intergenerational Transmission of Poverty in Finland in the 1990s
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2.
EXPLANATIONS FOR THE INTERGENERATIONAL
TRANSMISSION OF POVERTY
There are many explanations for the intergenerational transmission of poverty.
Stenberg (2000) has suggested three types of explanation which deal with cultural-
behavioural, policy-related and structural-economic factors. The first type of explana-
tion for the intergenerational transmission of poverty emphasises cultural-behaviour
factors. The concept of a ‘culture of poverty’ was developed by Oscar Lewis (1965; 1969)
and is characterised by various interacting social, economic and psychological features,
for example, the absence of proper schooling, poor financial circumstances, suspicion of
and lack of participation in society or in any other social institutions apart from the
family. An essential feature of the culture of poverty is intergenerational transmission. A
strong nuclear family which creates strong ties and dependence among family members
ensures the transmission of a culture of poverty as the younger generations inherit the
values, attitudes and customs from the older generation.
Behavioural aspects are also linked to the second explanation which emphasises the
role of welfare systems in society. This explanation has, in particular, dealt with the idea
of transmission of welfare dependency. For example in ‘Losing Ground’, Charles
Murray (1984) criticises American welfare programmes. For Murray, welfare
programmes unwittingly produce perverse incentives to remain unemployed and in
receipt of welfare. In addition, as in the culture of poverty, Mead (1992) argues that
families on welfare become trapped in poverty because receiving welfare benefits
changes the values and behaviour of parents and their children.
Cultural-behavioural and policy-related explanations are based largely on Anglo-
American experience. They are also linked to the debate on the ‘underclass’, which has
been an important feature of Anglo-American poverty research (e.g. Jencks and
Peterson, 1991). When we discuss the culture of poverty the focus is on the lifestyles of
poor families. It is a poverty based way of life, which in Finland is traditionally linked
with the problems of the landless population in the pre-industrial period (Haatanen
1968).
Researchers have also emphasised the importance of structural-economic explan-
ations for the intergenerational transmission of poverty. Some studies have
emphasised the role of human capital (e.g. Becker and Tomes, 1986) and others
have focused on social capital investment in childhood and early adulthood (e.g. Breen
and Goldthorpe, 2001). According to these studies, the lack of economic resources
hinders the development of human capital among children. As a result of low levels of
human capital, children find it harder to find good jobs. In addition, poor parents may
be less connected to job networks than better-off parents (Coleman, 1990). Structural
explanations also deal with general labour market conditions. For example, Wilson
(1987) argues that one factor behind intergenerational poverty and the urban
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underclass is the loss of manufacturing jobs in the inner city, which reduces people’s
chances of escaping poverty.
As Corcoran and Adams (1997) have argued, parents also have non-economic
resources, which are correlated with the intergenerational transmission of poverty.
Those include, for example, schooling and family structure. Low levels of
schooling may affect parents’ abilities to encourage and help children to achieve a
proper education. In addition, family structure is an essential issue in poverty itself but
also in the intergenerational transmission of poverty. For example, the break-up of a
marriage may lead to increased risk of child poverty, lack of supervision and lack of
role models. These factors could in turn lead children to be poor as adults. Corcoran
and Adams (1997) have also found that the intergenerational transmission of poverty
has gender differences. Their results suggest that parental poverty particularly affects
the...
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