Intergenerational mobility of subjective wellbeing in South Africa

Background: Intergenerational persistence is an important indicator of poverty trap which has been explored in literature using measures such as income, wealth, education, among others. Aim: This study aims at expanding the existing literature on intergenerational mobility (IGM) by going beyond conventional measures and adopting subjective wellbeing (SWB) as a more holistic measure of social stratification. Setting: The study considers the IGM of SWB in South Africa, accounting for possible endogeneity bias caused by simultaneity between parent and child SWB as well as the life-path patterns of SWB. Method: The study uses waves 1 and 5 of the National Income Dynamics Study panel data for South Africa using a range of regression specifications including fixed effects and Lewbel's internal heteroscedasticity-based identification. Results: The findings indicate that while positive significant persistence exists between parent and child SWB measured at the same time point, this is much lower compared to persistence measured using income. Mother-child and co-residents record higher intergenerational persistence compared to father-child and non-coresidents respectively. Further, considering the life-cycle dependency of SWB, the persistence reduces considerably. Lastly, the persistence is no longer found to be positive and significant when correcting for possible endogeneity bias in the SWB association of parents and children. Conclusion: This is the first study on IGM using the measure of SWB and the substantially different findings from other income-based studies points to the value of a more holistic assessment of IGM. Contribution: Further, it is also indicative of the non-income determinants of SWB trends in South Africa.