Intergenerational earnings persistence in Aotearoa New Zealand

Adult earnings rates Reflect parental earnings and ethnicity

How much do parents’ earnings shape their children’s future?

Does a child's future income depend on their parents' earnings? Our latest research explores intergenerational earnings persistence (IEP) in Aotearoa New Zealand using a rich dataset of 288,000 individuals born between 1986 and 1992. By linking these individuals to their parents through administrative records, census data, and household surveys, we uncover patterns in income mobility across generations.

We find that while children inherit some of their parents’ economic advantages or disadvantages, this explains only a small part of overall income inequality. Our analysis shows that, on average, a child retains about a quarter of their parents’ earnings advantage or disadvantage. We also examine how these patterns differ by ethnicity, gender, and employment type, shedding light on broader social and economic forces at play.

This research deepens our understanding of economic mobility in Aotearoa and highlights the role of structural factors—including discrimination and systemic barriers—in shaping opportunities. By identifying where inequality persists, we provide insights that can inform policies aimed at creating a fairer, more inclusive economy.

Explore the full findings and implications in our report.

DOI - 10.29310/WP.2025.01

Citation

Alimi, Omoniyi and Dave Maré. "Intergenerational earnings persistence in Aotearoa New Zealand.” Motu Working Paper 25-01. Motu Economic and Public Policy Research. Wellington, New Zealand.