Draft paper Please do not cite without permission of the author

Modernization Theory and Changes over-time in the Reproduction of Socioeconomic Inequalities in Australia
Dr. Gary Marks, Australian Council for Educational Research and University of Melbourne May, 2009
Email: Marks@acer.edu.au

Abstract
Modernization theory argues that, as societies industrialize and further develop, the influence of social background and other ascribed characteristics on educational and subsequent socioeconomic outcomes declines, while achievement in the education system becomes more important. The purpose of this paper is to investigate if propositions derived from modernization theory apply to Australian society during the second half of the 20th century. Specifically, these are (i) declines in the influence of socioeconomic background on education, occupation and earnings; (ii) increases in the occupational and economic returns to education; and (iii) decreases in gender inequalities on all three outcomes. These propositions are examined using data from nationally representative surveys conducted between 1965 and 2005. In accordance with modernization theory, it was found that the effects of socioeconomic background on education, occupational attainment and earnings have declined. Gender inequalities in education have been reversed and the gender gap in earnings has declined. The effect of education on occupational attainment has increased more strongly among men than women. Contrary to expectations from one interpretation of modernization theory, the returns in earnings from education have not increased.

Keywords: Modernization theory, Socioeconomic Background, Gender differences, Educational

Attainment, Occupational Attainment, Job Earnings, Trend Studies.

Introduction
A central concern in sociology is the reproduction of socioeconomic inequalities. Although there is little consensus (or even debate) about acceptable levels of inequality in education, occupation, income or wealth, there is almost universal agreement that in contemporary societies the strong transmission of socioeconomic inequalities across generations is undesirable. In other words, social origins should not largely determine the educational and other socioeconomic attainments of people in modern societies. This view is supported from both sides of politics. The left views the social barriers faced by those from lower socioeconomic backgrounds as a fundamental social justice issue. The neo-liberal right, focusing on economic efficiency, maintains that ability and performance should govern access to important social positions, not socioeconomic background. This concern with reducing the degree to which socioeconomic inequality is reproduced between generations can be broadened to include other ascribed characteristics, such as gender, race and ethnicity. The purpose of this paper is to examine the reproduction of inequalities in Australia during the second half of the 20th century. It focuses on the influence of socioeconomic background and gender on three socioeconomic outcomes: education, occupation and job earnings. The analyses address several fundamental questions about the reproduction of socioeconomic inequality in a modern society: Has socioeconomic background become less important? Have gender inequalities declined? Is education becoming more important?

Theoretical Background
The theoretical background to this paper is modernization theory. In the context of social reproduction, modernization theory holds that as societies develop they become more open, socioeconomic achievements become less tied to social background and other ascribed characteristics, and education becomes more crucial to subsequent socioeconomic outcomes (Blau & Duncan 1967, DiPrete & Grusky 1990). Put simply, social background becomes less important and social attainment becomes more universalistic (Goldthorpe 1997, Levy 1966, Parsons 1977). Several social processes have been proposed as, at least partially responsible. Apart from industrialization, these include post-industrialization (Bell 1973), the decline in

the social functions of the family (Popenoe 1988), capitalist expansion, individualism, urbanization, educational expansion, the welfare state (Beller & Hout 2006), and specific government policies aimed at increasing equality of opportunity in education (see Paterson & Iannelli 2007) and prohibiting discriminatory practices. So modernization theory is not a theory as such, but a body of work making the same contention that social background is becoming less important; although different scholars emphasize different social processes. However, before adjudicating on the importance of particular social processes, it needs to be established if the general propositions of modernization theory are true. The counter to modernization theory, reproduction theory which also has many diverse strands assumes that the intergenerational reproduction of socioeconomic inequalities are strong and unchanging. 1 There is little consensus on whether modernization theory or reproduction theory better explains trends over time or differences between countries in the reproduction of social inequalities (Breen & Jonsson 2005). Treiman (1970) formally derived several propositions on the intergenerational reproduction of socioeconomic inequalities: The more industrialized a society, the smaller the influence of parental status on educational attainment. The more industrialized a society the smaller the direct influence of fathers occupational status on sons occupational status. The more industrialized a society, the greater the direct influence of educational attainment on occupational status. The more industrialized a society, the smaller the direct influence of education on income. Treimans propositions require some updating; for example the focus on industrialization which if defined in terms of the proportions of adults engaged in agriculture and industrial production occurred a long time ago for contemporary developed countries should be replaced by modernization. Processes such as urbanization, educational expansion and

bureaucratization are ongoing so, hypothetically, are likely to further reduce the reproduction of socioeconomic inequalities. Furthermore, Treimans focus on fathers and sons needs to be broadened to include mothers and daughters. Although Treiman refers to income, earnings is the more appropriate concept since modernization theory is primarily about the labor market. The increasing penetration of bureaucratic selection and promotion procedures, the decline of the family firm and government policies prohibiting discrimination should have had effects primarily on the labor market. The following discussion reformulates and extends Treimans (1970) propositions about the relationships involving socioeconomic background, education, occupation and earnings (Figure 1). Figure 1 about Here According to the modernization thesis, the impact (relationship i in Figure 1) of socioeconomic background on education should decline, although the mechanism for this is unclear. Possible mechanisms include more meritocratic assessment criteria, the expansion of education to higher levels, the increasing educational aspirations of parents from diverse social groups for their children, and specific educational polices designed to improve the educational outcomes of students from disadvantaged backgrounds. Modernization theory also implies that the relationship between socioeconomic background and occupation (iv in Figure 1) should decline. Again the social processes are unclear but include declines in the tradition of sons following in their fathers occupation and in the viability of small-scale family businesses, the rise of large-scale public and private bureaucracies, the expansion of professional and managerial jobs, and the penetration of bureaucratic selection and promotion procedures into the private sector. Concomitantly, the impact of education on occupation (ii in Figure 1) should increase as university qualifications and other credentials increasingly govern labor market entry and career progression. The influence of socioeconomic background on earnings (v in Figure 1) should decline for much the same reasons as that for the hypothesized decline in the effect of socioeconomic

background on occupation. Employers are unlikely to pay a premium to employees from more privileged socioeconomic backgrounds, net of educational qualifications or experience. In the past, socioeconomic background may have been associated with higher pay by virtue of its association with other social characteristics such as demeanor, cultural knowledge, accent and social connections. The educationlabor market relationship (iii in Figure 1) is an ambiguous relationship in modernization theory. A stronger relationship could be argued as evidence for modernization; if higher educational qualifications mean greater skills and hence productivity, employers will reward higher levels of education, so the relationship should become stronger over time. Therefore, an increase in the impact of education on earnings is consistent with modernization theory (Goldthorpe 1997). However, increasing effects of education in the context of stable relationships between educational attainment and social origin would increase the intergenerational transmission of socioeconomic inequality. Furthermore, a stronger relationship between education and labor outcomes may not be the result of employers rewarding higher skills and productivity but professional and managerial groups increasing their market power (and thus earnings). Such an increase is not consistent with the main tenants of modernization theory. It is noteworthy that Treiman (1970:220) hypothesized that the impact of education on income should decline because the expansion of education should lower the market value of educated workers. Modernization theory unambiguously contends that the influence of educational attainment on subsequent socioeconomic outcomes occupation and earnings should be much stronger than the effects of socioeconomic origins (in Figure 1 ii >> iv and iii>> v). Gender inequalities should decrease with modernization. Inglehart (1997) argues that virtually all pre-industrialized societies had strictly defined gender roles where women were more or less excluded from the economic sphere. Over the last fifty years women in industrialized countries have become more educated and, in almost all western countries have increasingly participated in the workforce. One of the aims of the feminist movement is equality in the labor market,

allowing women to become financially independent. This involves changes in social norms about womens education and careers and specific legislation designed to improve womens educational and labor market outcomes. In addition, there are other social forces at work increasing womens participation in the workforce over the life-course: financial pressures for two-income families; desires for self-fulfillment; delayed and less-frequent child-bearing; employer demand for often cheaper and more flexible female labor; and growth in the types of occupations women enter. Against this are enduring social norms about the sexual division of labor in paid and unpaid work, and gender-based discrimination that mitigate against gender equality in the labor market. The Australian Context In Australia, a number of policies and judicial decisions have aimed to reduce the reproduction of socioeconomic and gender inequalities in education and the labor market. In education, the most notable policy was the abolition of university fees in 1974 by the then social democratic Labor government. The logic of this policy was that high-ability students from lower socioeconomic backgrounds could not afford the cost of attending university. Unexpectedly, the abolition of fees was not followed by a more equitable socioeconomic composition of university students (Anderson & Vervoorn 1983, Crocket 1987). This is probably because socioeconomic background exerted its effects earlier in the school career. Until the mid-1980s, only about 30 per cent of school students completed school so the majority of students from lower socioeconomic backgrounds were simply not eligible to apply to university. Fees were re-introduced in 1989 (also by a Labor government) through a government-sponsored deferred payment scheme, the Higher Education Contribution Scheme (HECS). At its introduction and whenever the HECS system is amended (which usually involves fee increases) critics argue that HECS will increase socioeconomic inequalities in higher education. However, since it is a deferred payment scheme (repayment is through the taxation system and begins after income rises above a threshold level) HECS is unlikely to deter students from lower socioeconomic backgrounds from entering university once they have been offered a place.

Socioeconomic inequalities in educational outcomes at the primary and secondary school levels remain a policy focus for both federal and state governments. Most state governments provide extra-funding to government schools with a high proportion of students from disadvantaged backgrounds, such as the Disadvantaged Schools Program in New South Wales. The funding of non-government schools has been based on their level of material resources or the socioeconomic composition of the schools students (Ainley et al. 1995, Marks et al. 2000a). Unlike the university context, there are no specific dates when school policies on socioeconomic disadvantage underwent substantial change. As in most industrialized countries, Australian education departments have implemented various schemes to promote the educational outcomes of girls. These have included changes to the curriculum and assessment process, and an emphasis on the learning needs of girls. Such policies have in some quarters been viewed as too successful and during the last ten years or so there has been a shift to policies on improving the educational outcomes of boys (Ailwood & Lingard 2001, Marshall 2000). Formal gender differences in the labor market have been addressed by both judicial decisions and legislation. In 1969, the Commonwealth Conciliation and Arbitration Commission ruled that women in certain occupations should be paid the same as their male counterparts. This was followed by a second court decision in 1972 that established the general principle of equal pay for equal work (Borland 1999). The next milestones were the Sex Discrimination Bill (1984) and the Affirmative Action (Equal Employment Opportunity for Women) Act (1986). These acts were intended, among other things, to reduce the gender gap in wages by prohibiting discrimination against women in the workplace (Kidd & Meng 1997). More generally, Australian governments of both political persuasions have implemented neoliberal (or economic rationalist) policies since 1983. These include, floating the Australian dollar, deregulating various industries and encouraging competition, selling government owned enterprises (such as Qantas Airways and the Commonwealth Bank), reducing the role of centralized wage fixing, welfare reform, free trade deals and, the progressive and unilateral reduction of tariffs. Although most observers agree that these changes have been beneficial to

the Australian economy, critics argue that economic rationalist policies increase socioeconomic inequalities and their reproduction (Carroll & Manne 1991, Pusey 2003). Furthermore, it is argued that such policies are particularly detrimental to women (Gellecum et al. 2008). Empirical Evidence Although it may appear self-evident that ascribed characteristics have become less important since World War II, there is not unequivocal empirical support for the major contentions of modernization theory. Occupational mobility research focuses almost exclusively on the relationship between socioeconomic background and occupation (iv in Figure 1) using categorical measures of occupational class or group. Although the impetus for Lipset and Zetterbergs (1959) crossnational comparison of occupational mobility was modernization theory, they found that somewhat surprisingly, the rates of absolute mobility in the USthe archetypal modern societywere much the same as with the old world societies of western Europe. Focusing on relative rates of mobility which take into account generational differences in the occupational structure, Erikson and Goldthorpe (1992) concluded that occupational mobility was not increasing, contrary to the prediction of modernization theory. This conclusion of trendless fluctuation was becoming the general consensus until Breens (2004) edited collection of mobility studies of European countries found a trend toward greater openness, although Germany and Great Britain were exceptions. For Australia, there is evidence of increasing openness between the mid-1960s and 1990 but the changes were relatively small (Jones et al. 1994, Marks & Jones 1991). Again contrary to the predictions of modernization theory Shavit and Blossfelds (1993) edited collection concluded that the relationship between socioeconomic background and education in most industrialized countries had not declined. This conclusion of persistent inequality has much to do with the particular methodological approach used which focuses on changes in relative chances of those from different class backgrounds in successfully making the transition from one educational level to the next. At much the same time, the maximally maintained

inequality thesis was developed to explain the general finding of persistent inequality (in the transition process) in the face of educational expansion (Raftery & Hout 1993). In contrast, declines over time in the overall (linear) relationship between socioeconomic background and educational attainment were found in most developed countries (Rijken 1999, also in various chapters in Shavit & Blossfeld 1993). Returning to the conclusion of persistent inequality in educational transitions, Breen and Jonsson (2005) list a number of subsequent studies which show a trend toward equalization. In a reanalysis with more data, Breen et al. (2005) found declines in the influence of socioeconomic background on educational transitions in six of the eight countries investigated. In Australia, there is evidence of a decline in the influence of socioeconomic background on education. Graetz (1987, 1988) found that both father's and mother's education have become less influential in the process of educational attainment in Australia. Analyzing youth cohort data, Fullarton et al. (2003) found declines (both absolute and relative) in socioeconomic inequalities in school completion between the mid-1980s and 2001. For participation at university, Marks and McMillan (2003) concluded that the effect of socioeconomic background (net of ability) was weaker in younger cohorts. A later study found declines in both the effects of a class background and parental education on having obtained a bachelors degree (Marks & McMillan 2007). There is no indication that the implementation of, or reforms to, HECS increased socioeconomic inequalities in university participation (Marks 2008, Marks & McMillan 2003, 2007). The contention that education has a much stronger influence than socioeconomic background on occupational attainment and earnings is clearly supported by a large number of studies. Both American and British studies conclude that the impact of education is much stronger than fathers occupation (Blau & Duncan 1967, Halsey et al. 1980). In Australia, a much stronger effect for education than fathers occupation on occupational destinations was found in data collected as long ago as 1965 (Broom & Jones 1976: 98-100). Broom et al. (1980:32) found that basic education had more than twice the effect of father's occupation on first job. In a

cross-national comparison, Treiman and Yip (1989) found that the ratio of educational attainment to ascription is higher in more-industrialized societies. The prediction of increasing effects of education on occupational destinations and decreasing effects of socioeconomic background are confirmed in studies conducted in both the United States and Britain (Featherman & Hauser 1978, Halsey et al. 1980, Kerckhoff et al. 1982). For Australia, a comparison of birth cohorts in the 1965 data indicated an increasing effect of education (Broom & Jones 1976:101-102). Marks (1992) found an increase in the influence of education on occupational attainment between 1965 and 1990, and declines in the influence of father's occupational status. However, more recent studies have not always found increasing effects of education. For the United States, DiPrete and Grusky (1990) found an increasing effect of education on occupation among men but not among women. Goldthorpe (1997) noted that some trend studies published in the 1980s and 1990s found a weakening rather than a strengthening effect of education on occupational attainment. Economists approach the relationship between education and earnings as the rate of return. This perspective is consistent with human capital theory where education is understood as an investment in future earnings. The rate of return is the percentage increase in earnings for each additional year of education. In Australia, the rate of return is around 5 to 8 per cent (McNabb & Richardson 1989, Miller et al. 2005, Trostel et al. 2002). Using a variety of methods, Leigh and Ryan (2008) argued that the rate of return was higher, at around 10 per cent. Although the return to earnings from education is increasing in the United States (Autor et al. 2005), there are only small increases or no increase at all in other countries (Burbidge et al. 2002, Gottschalk & Joyce 1998). Gottschalk and Joyce (1998) found that Australia ranked fourth (of twelve countries) in the increase in the education premium between 1985 and 1989 which followed a much smaller increase during the early 1980s. Borland (2002) concluded that a three year bachelor degree increases earnings by between 14 and 18 per cent, noting that this estimate was not higher than those of earlier studies.

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The one study on earnings mobility in Australia, using fathers occupation as a proxy for fathers income found low intergenerational earnings elasticity2 (that is, high intergenerational earnings mobility) and no evidence of changes over time (Leigh 2007). Gender inequalities in education have largely been reversed. In contrast to the late 1970s and early 1980s, a substantially higher percentage of young women than young men complete school and attend university (Fullarton et al. 2003, Marks et al. 2000b). Multivariate analyses of trend data also show strong declines in the effect of being male on both school completion and university participation (Marks & McMillan 2003, 2007). Decline and reversal of gender differences in education have also occurred in many other countries (Blossfeld & Shavit 1993, OECD 1996, 35, 320-321). Although there is substantial occupational segregation by gender, there are only minor gender differences in occupational attainment when measured in terms of occupational prestige or a socioeconomic index. This is because men are more likely to be at each end of the occupational distribution, while women are more likely to be in the middle. There is no evidence of emerging gender differences in occupational attainment. Modernization theory implies that social attributes like gender should have little or no bearing on job earnings or at least, gender differences should be declining. The gender gap in earnings in Australia may be narrowing. According to the OECD (2001), the difference in Australia in the malefemale gap in full-time median earnings as a percentage of male full-time earnings has declined from 22 per cent in 1975 to 14 per cent in 1999. The gender gap in earnings in Australia declined during the 1980s and 1990s and is predicted to decline further, albeit more slowly, over the next few decades (Kidd & Shannon 2002, Kidd & Shannon. 2001). Most likely, much of this decline can be attributed to womens increasing educational attainment and workforce experience. Kidd and Xin (1997) suggest that anti-discrimination legislation made little impact since the decline in the gender gap was slower during the 1980s than the 1970s.

Data, Measures and Analyses

The analyses of the adult population used data collected between 1965 and 2005 from nine cross-sectional surveys and one household panel. The surveys comprise the 1965 Social

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Stratification in Australia Study (Broom et al. 1965), the 1967 Australian Political Attitudes Study (Aitkin et al. 1967), the 1973 Social Mobility in Australia project, (Broom et al. 1973), the 1984 National Social Science Survey (Kelley et al. 1984), the Australian components of the 1987, 1989, 1990, 1992 and 1999 International Social Science Project surveys including the 1987, 1992 and 1999 Inequality Modules (Kelley et al. 1984-1988, 1992, Kelley & Evans 1999) and the 2005 wave of the Household, Income and Labour Dynamics of Australia (HILDA) study (Watson 2008). Data for the 1965, 1967, 1973, 1984 and 2005 studies were collected by face-to-face interviews, while the other studies were administered by mail.3 The 1965 Social Stratification survey did not collect data on womens education or occupation. These data are the best social stratification data available in Australia and allow comparisons of the process of social stratification over a 40-year period. The representativeness of these samples in terms of gender, age and other distributions has been demonstrated in various publications (Aitkin 1982, Bean 1991, Broom & Jones 1976, Broom et al. 1980, Evans & Kelley 2002a, Evans & Kelley 2002b, Watson 2008). For the HILDA study, the 2005 wave was chosen for analysis because it is the first wave in which respondents were asked about their parents education. In order to avoid possible clustering effects of analyzing individuals living in the same household, analysis was limited to adults aged 18 or older, randomly selected from each household. All these data include weights to adjust for differences in the distributions of benchmark variables between the sample and population. For the HILDA study the weights also adjust for differential attrition by respondent characteristics between waves 1 and 5.

Measures
In the analyses of educational attainment there were two dependent variables: years of education and a university qualification. Unlike education systems in many European countries, the Australian system does not have clear and standard transition points except the completion of school (Year 12) at which performance largely determines university entrance and other post-school pathways.

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The measure of years of education is simply years of formal education (including university and post-graduate education but excluding preschool education) ranging from zero to 20. The second measure of educational attainment, a university qualification, was used because a university degree is particularly important to subsequent labor market outcomes. The minimal university qualification was a three-year bachelor degree. University qualification was coded as a dichotomy assigning a score of one for a university qualification (three-year bachelor degree or higher) and zero for no university qualification. Occupational attainment is measured by occupational status. Occupational status is a useful summary measure of the social standing, prestige or desirability of occupations. Ganzeboom and Treiman (1996) make the point that occupational prestige measures are generated from popular evaluations of occupational standing and that occupation is the single most important dimension of social interaction. An important analytical advantage of occupational status and other single measures of socioeconomic background is that it allows a single parameter test of change over time, which is not possible with categorical or multidimensional measures of social standing. For this study occupational status was measured by the International Socioeconomic Index (ISEI). Responses to the questions on occupations were coded according to the International Standard Classification of Occupation 1988 (ISCO88), as provided by the International Labor Office. ISCO88 is a four-digit hierarchical coding schema comprising 390 different occupational categories. Then ISEI scores are assigned to each occupational code. The socioeconomic index scores are based on maximizing the relationship between occupation and income, net of education.4 The index ranges from 16 to 90. Examples of the scores assigned to occupations are: medical practitioners (scored 88); judges (90); teachers (69); cooks (30); police officers (50) and farm hands (16) (see Ganzeboom & Treiman 1996). Job earnings are limited to those with a job, including the self-employed. Earnings were adjusted to 1990 dollars so that reported earnings before 1990 were inflated and after 1990 deflated. The adjustments were based on the Consumer Price Index (CPI) obtained from the

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Australian Bureau of Statistics (2008). The analysis of earnings is restricted to data collected since (and including) 1984, since the earlier surveys do not include comparable measures of earnings for individuals. Two measures of socioeconomic background were constructed. Conclusions on trends based on a single indicator of socioeconomic background may be misleading, since single measures, by definition, do not include multiple aspects of socioeconomic background so most often have substantially weaker relationships with outcome variables than composite measures. The first measure of socioeconomic background was based on fathers occupational status (ISEI scores). The second was a composite measure of socioeconomic background (referred to from here on as SES). The occupational status measure covers a longer time period whereas the SES measure has stronger relationships with education and subsequent socioeconomic outcomes. Both measures were used for separate analyses of educational and occupational outcomes. Since the analyses of earnings covered a shorter time-frame (1984-2005) only the SES measure was used. The composite SES measure comprises fathers occupational status (ISEI score), and fathers and mothers education. Fathers and mothers education were measured as years of formal education at school and in post-secondary education. The three components were combined into a single variable by the sheaf variable method (see Whitt 1986). The resulting sheaf variable maximizes the effects of the component indicators on the respective dependent variable so that the effect of the constructed measure (SES) is almost invariably stronger than that obtained from a composite variable constructed by other procedures, such as summing the component variables. The R square value obtained from regression analysis on the respective dependent variable of the individual component variables (fathers ISEI, and mothers and fathers years of education) is identical to that obtained from regression analysis of the sheaf variable. The sheaf variable (SES) could not be constructed from the 1965 and 1967 data due the absence of suitable measures of parental education. To maintain consistency in the SES measure across data sets, cases in which data on any of the three indicators were missing were not included in the analyses. SES was standardized to a mean of zero and a standard deviation of one.

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Continuous independent variables have been centered since several are used to construct interaction terms, and centering reduces the possibility of severe multicollinearity in which the estimates become unstable (Aiken & West 1991). Also with centering, the estimated coefficients for the main effects refer to meaningful values rather than the meaningless score of zero on variables such as fathers occupation, education and age. In addition, the intercept is more meaningful with centering since it is an estimate of the score on the dependent variable for respondents scoring zero on all the independent variables. For these analyses, year of study was centered about the year 1984; age at 45 and 30 for the analyses of occupational status and earnings5 respectively; and hours worked was centered at 35 hours per week. All three variables were further transformed by dividing by 10 so a unit difference is equivalent to a 10 year or 10 hour difference, respectively. Since age tends to have a curvilinear relationship with earnings, the analysis of earnings included both linear and quadratic terms for age. Before centering, the measure of hours ranged between 1 and 70; if hours worked was greater than 70 hours per week the value was recoded to 70 hours. Gender is measured by assigning a score of one to men and zero to women. Thus the coefficient for gender indicates the average difference between men and women on the respective dependent variable. All analyses include dummy variables for the year of the study not only to take into account general increases over time in educational attainment and smaller increases in occupational status6, but also to take into account differences in study design.

Analyses
The analyses of occupational status and earnings were restricted to respondents aged between 30 and 65 at the time of the study, since in stratification research 30 is generally considered the age occupational maturity is reached and 65 is the traditional age of retirement in Australia. For the analyses of educational outcomes, the age range was extended to between 26 and 75, 26 being the age by which almost all young people have completed their full-time education. In order to test for changes over time in the effects of socioeconomic background, gender and education interaction terms were constructed with the continuous (centered) measure of year of study. In the analysis of occupational status and earnings, interaction terms between age and

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education were included to take into account possible increases in the returns to education with age. Interaction terms between socioeconomic background and age were also included to model possible declines in the effects of socioeconomic background with aging. It should be noted that these model specifications include a number of challengeable assumptions, most notably that the relationships are linear, and that different social groups are affected the same way. Although it is possible to model non-linear relationships and group heterogeneity, more complex specifications would undermine the central purpose of this study which is to test general propositions about changes in the influence of socioeconomic background and gender on educational and socioeconomic outcomes. Furthermore, more complex models with a large number of parameters are more difficult to estimate and interpret. A second criticism is that not all relevant variables are included. For example, parental income and wealth are not included as aspects of socioeconomic background and both influence educational outcomes (Conley 2001, Jencks et al. 1979, Jencks et al. 1972). However, reliable measures of income and wealth are not available in the cross-sectional studies analyzed here, where respondents are asked to provide information about their parents. Furthermore, family income tends to have a weaker impact on educational outcomes than other parental characteristics, at least in the United States and Britain (Aughinbaugh & Gittleman 2003, Blau 1999, Ganzach 2000, Plug & Vijverberg 2005). The same can be implied for wealth.7 There is no reason to suppose that financial factors are relatively more important in the Australian context than in the United States or Britain. Since the data here do not contain a measure of ability, these analyses are based on the not unreasonable assumption that the correlation of ability with socioeconomic background has remained more or less constant over the time period investigated.8 Apart from the analyses of a university qualification, the data was analyzed by ordinary least squares regression so the coefficients represent the average linear change on the dependent variable for a unit change in the independent variable. Logistic regression was used in the analyses of a university qualification. In the text, the logistic regression coefficients are interpreted as odds ratios, which are the exponents of the coefficients. For the analysis of

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earnings, earnings were logged; a common practice in the analysis of earnings, income and wealth since it reduces the influence of extreme values. In the text, the coefficients are discussed as percentage effects9. For education, the percentage effects can be interpreted as the returns from investing in education and for gender the earnings premium for being male compared to being female. The analyses are accompanied by the R square values that indicate how much variation in the dependent variable can be accounted for by the variables in the model. For the logistic regression analyses, R square is a pseudo R square developed for logistic models. In all tables statistical significance is indicated in the conventional manner. T-ratios (Wald Chi-Squares in the logistic regressions) are also included in the tables to provide more information.

Results
Education
Table 1 provides evidence of a substantial decline in the influence of socioeconomic background on years of education. The effect of fathers occupational status (Panel 1) is declining by about 0.06 of a year of education (or about 8 per cent of the main effect in 1984) per decade. Column 1 shows that, in 1984, a ten-unit increase in fathers occupational status increases average years of education by three-quarters of a year (0.75 years). Twenty-one years later, in 2005, the (calculated) effect is lower, at around 0.62 years. Panel 2 also shows a decline in the impact of SES (recall that SES is a composite of fathers occupation, and both fathers and mothers years of education) on educational attainment also declined. The estimate of 0.22 years of education per decade is about 13 per cent of its effect in the 1984 study. Separate analyses by gender show that the decline in the effects of SES on years of education is stronger among men than women. Table 1 also shows changes in the effects of gender. The coefficient of 0.41 (in Panel 1) for gender shows that in 1984 men had, on average, nearly half a year more education than women. The significant interaction term shows that the gender difference is declining by about one-fifth

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of a year per decade, so assuming the trends are linear, the gender difference had disappeared 20 years later. Tables 1 and 2 about Here The findings are very similar for a university qualification (Table 2). The effect of socioeconomic background on university education has declined. The impact of fathers occupational status on obtaining a university qualification is declining by about 7 per cent per decade (Panel 1, Table 2). As was the case in the analysis of years of education a stronger decline (around 10 per cent) was found with the composite SES measure (Panel 2). In 1984, a one standard deviation increase in socioeconomic background increased the odds of a university qualification (as opposed to not having a university qualification) 2.6 times. Twenty years later, the odds have declined to 2.1. The separate gender analyses indicate that the decline in the effect of socioeconomic background on a university qualification is stronger among men than women, as was the case for years of education. Changes over time in gender differences in university qualifications are more striking than that for years of education. The effect of 0.43 for males indicates that in 1984 the odds of men having a university qualification were 1.5 times that for women. However, the large coefficients for the interaction terms relative to the main effects indicate that the gender gap in having obtained a university degree had disappeared twenty years later.

Occupation
The total or overall effect of socioeconomic background on occupational attainment has also declined. The effect of fathers occupational status has declined 0.4 ISEI units (about 14 per cent) per decade (Column 1, Table 3). In 1984, a 10 ISEI unit difference in fathers occupational status was associated with a difference of about 3.2 ISEI units in occupational status. Ten and twenty years later, this effect had declined to 2.7 and 2.3 ISEI units, respectively. Table 3 (Panel 2) shows that the overall impact of the broader SES measure on occupational attainment is also declining. The decline with the SES measure is a little stronger at around 16 per cent per decade.

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The addition of education to the model substantially increased the explained variation from 12 to 32 per cent (Table 3) consistent with the general conclusion that education has a much stronger impact on occupational attainment than socioeconomic background. The decline in the effects of socioeconomic background was also evident when controlling for education since both the interactions of fathers occupational status and SES with year of study remained negative and statistically significant, although lower in magnitude as were the main effects. Among women, there was a statistically significant decline in the effect of fathers occupational status on occupational attainment, but no significant decline with the broader SES measure. This implies that there was no decline in the effects of fathers and/or mothers education among women on occupational attainment. Tables 3 & 4 about Here Consistent with modernization theory, the effect of years of education on occupational attainment is increasing over time among both sexes. This effect was evident in both sets of analyses using different measures (Table 3). The increase is fairly substantial rising by around 8 per cent per decade. Thus, occupational attainment has become more tied to education. In both sets of analyses the increase is stronger among men than women. Table 4 shows that a university degree substantially increases occupational attainment by between 15 and 20 ISEI units. However, in contrast to the finding for years of education (Table 3) there was no increase in the returns to occupational attainment from a university degree. In fact, the coefficients were consistently negative (but statistically significant). Further analysis (not shown) revealed that the increase in the returns to occupational attainment from years of education was from years of education at school (up to 12 years) rather than years in postschool education.

Earnings
The earnings analyses also indicate a substantial decline in the total effect of socioeconomic background (measured by SES) on earnings. The effect declined by around 18 per cent per decade (Table 5). However, socioeconomic background is not a strong predictor of earnings.10

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The negative interaction effect between SES and year of study remained statistically significant when controlling for education among men but not among women. Table5 about Here

Table 5 indicates that gender differences in earnings are declining over time, but substantial differences still remain. In 1984, men earned on average twice as much (over 100 per cent) as women when not taking into account hours worked per week (calculated from Column 1, Panel 1) and 55 per cent more than women taking into account differences in hours worked (Column 1, Panel 2). Twenty years later, in 2005, the equivalent estimates are 84 and 40 per cent. According to the analyses presented in Table 5, the gender gap in earnings (net of hours worked) is declining by about 11 per cent per decade. The estimates for gender and the interaction term between gender and year of study did not substantially change with the addition of education (Panel 2). So the decline simply cannot be attributed to the relative increase in educational attainment among women. It should be noted that these models do not take into account career interruptions due to family commitments and occupational segregation which are relevant to the gender gap in earnings. The return in earnings to education estimated here is between 7 and 9 per cent per year of education and between 30 to 40 per cent for a university degree (which includes post-graduate and honors degrees as well as three-year bachelor degrees). These estimates are consistent with those in the literature (summarized earlier). The returns to education appear slightly higher for women than men. However, in the context of modernization theory, there is no indication of increasing rates of return to earnings from education. The interaction terms with year of study for both years of education and a university degree were very small and not statistically significant.

20

Conclusion
This study shows that the reproduction of socioeconomic inequalities in Australia has been declining. The effects of socioeconomic background (measured in two different ways) on years of education, a university qualification, occupational attainment and earnings have declined and in some instances, quite substantially. Similarly, gender differences in education have declined rapidly and these analyses identified a decline in the gender gap in earnings although large differences remain. Therefore, the predictions of modernization theory of a decline in the influence of ascribed attributes, in this case socioeconomic background and gender, on educational and other socioeconomic outcomes are supported. Although it could be argued that the detrimental effects of neo-liberal economic policies on the reproduction of socioeconomic inequalities will only become apparent in the future, there are indications that the decline in the effect of socioeconomic background will continue. According to Australian component of the OECDs PISA study, the impact of socioeconomic background on performance in reading, mathematics and science among 15 year old students weakened between 2000 and 2006 (Thomson & De Bortoli 2008:225-228). Student achievement (as measured by test scores) has strong relationships with subsequent educational outcomes such as school completion (and noncompletion) and university entrance (Marks 2007, Marks et al. 2000b, Marks & McMillan 2003, 2007). Further support for a major contention of modernization theory is the finding that the effects of education on occupational attainment are increasing. The increase in the effects of years of education can be attributed to increases in the effect of years of education at school, rather than any increase in the effect of a university qualification. This may be because employees screen applicants based on whether they have finished school. The impact of education on occupational attainment increased more strongly among men than among women. However, an important proposition associated with modernization theory was not supported: an increase in the impact of education on earnings. This finding suggests that the labor market is not increasing the premium paid to more-highly-educated workers. There are several reasons why this may be so: the demand for educated labor may be more or less matching supply, or

21

possibly changes in the economic returns are quite heterogeneous, increasing for certain types of education and jobs, but constant or declining for others. On the other hand there is no evidence of a decline in the returns to a university degree despite substantial increases since the 1960s in the proportion of adults with a university degree. This paper shows that there has been a general decline in the reproduction of socioeconomic inequalities in Australia. However, there is little understanding of the processes involved; for example, the importance of educational reforms, changing parental aspirations, individualism, bureaucratic selection procedures, and a decline in the socialization role of the family. Alternatively, the decline may be due to a range of social processes which are difficult to identify empirically. Further empirical work on modernization theory may isolate those factors most influential for these changes or at least, refute some of the processes that have been proposed.

22

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27

NOTES
1 An obvious but largely unsaid criticism of reproduction theory is that the intergenerational transmission of socioeconomic inequalities is much weaker than the theories assume. Typically less than 20 per cent of the variation in educational and socioeconomic outcomes is accounted for by socioeconomic background and with only one indicator of socioeconomic background such as, fathers occupation or mothers education this figure is around 10 per cent in most industrialized countries. 2 Elasticity is the fraction of parental income transmitted from parents to their children. It simply the regression coefficient linking fathers or familys logged income on adult childs logged income. The estimate for income elasticity in Australia by Leigh (2007) was 0.2 and after correction between 0.2 and 0.3. 3 A mode effect was investigated and found not to change the substantive conclusions. Analysis of the 1984 to 1999 data were run with and without data from the 1984 survey to test the possibility of mode effects since the 1984 survey was the only face-to-face survey of this group of National Social Science and International Social Survey Program surveys. The estimates from both analyses were very similar. 4 The construction of the ISEI through maximizing the impact of occupation on income (or reducing the effect of education on income) means that the ISEI index is closer to Hauser and Warrens (1997) concept of incomeoccupational status rather than education-occupational status. 5 Age was centered at 30 for the analysis of earnings because the model included a quadratic term. Quadratic terms cannot be used with centered variables because negative values change their sign after squaring. Since quadratic terms were not included in the analyses of occupational status, the linear term was centered at a value close to the average age. 6 Since earnings have been equated to 1990 dollars using the CPI, there is little difference in the estimates for the year of study dummy variables in the analyses of earnings. 7 Despite recent increases in wealth inequality in the United States, Morgan and Kim (2006) found no increase in the impact of household wealth on college enrolment. Their published estimates could be interpreted as a decline in the impact of wealth. For Poland, Belbo and Lauer (2004) found only weak effects for parental wealth (and income). 8 Morgan and Kim (2006) made the same assumption when examining the effects of increases in income and wealth inequality on college entrance. 9 The formula to convert the estimates on logged wealth to percentage effects is: percentage effects = (exp(estimate) -1) x 100.

10 The weaker effect of SES on earnings than on occupation and education is indicated by the much smaller T ratio in the earnings analysis (around 6) compared to T ratios of around 34 for occupation and over 40 for education (Column 1 in Tables 1-4). Using the method presented by Wolf (1986) which adjusts for sample size these are equivalent to standardized regression coefficients of 0.06, 0.29 and 0.35.

28

FIGURE AND TABLES

Socioeconomic Background iv

Earnings

Occupation iii ii Education

Figure 1: Model of the Relationship between Socioeconomic Background, Education, Occupation and Earnings

Table 1: Effects of Socioeconomic Background and Gender on Years of Education Over Time

Men and Women

Men

Women

Panel 1 (1965-2005)
Intercept Male Male by Year Fathers Occupational Status Fathers Occupational Status by Year R Square Number of Cases 10.63*** 0.41*** -0.12*** 0.75*** -0.06*** 0.18 26,537 (150.9) (9.0) (-3.8) (53.9) (-6.1) 0.77*** -0.06*** 0.18 14,274 (43.0) (-4.7) 0.71*** (31.3) -0.05** 0.19 11,776 (-3.0) 11.17*** (101.9) 10.46*** (122.6)

Panel 2 (1973-2005)
Intercept Male Male by Year SES SES by Year R Square Number of Cases 11.07*** 0.56*** -0.22*** 1.70*** -0.22*** 0.26 18,319 (134.4) (9.8) (-5.5) (50.2) (-9.8) 1.76*** -0.28*** 0.24 9,559 (38.3) (-8.8) 1.61*** -0.14*** 0.28 8,724 (32.1) (-4.4) 11.63*** (90.9) 10.99*** (110.6)

Note: Ordinary Least Squares Regression Coefficients * 0.01<P<0.05, ** 0.001 <P<0.01 *** P<0.001 (T Ratios). SES is a standardized sheaf variable comprising fathers occupational status and fathers and mothers education. For Interactions, Year centered at 1984 and then divided by 10. Men scored 1 and women 0. Fathers occupational status centered at mean and divided by 10. Estimates control for year of survey.

30

Table 2: Effects Socioeconomic Background and Gender on University Education Over Time

Men and Women

Men

Women

Panel 1 (1965-2005)
Intercept Male Male by Year Fathers Occupational Status Fathers Occupational Status. by Year Adj. R Square Number of Cases -2.36*** 0.43*** -0.22*** 0.45*** -0.03** 0.15 26,480 (1024.0) (55.9) (36.7) (1045.0) (10.6) -1.90*** (458.4) . . 0.46*** (741) -0.03* 0.14 14,646 (6.2) 0.44*** (285.3) -0.03 0.15 11,797 (2.7) -2.50*** (528.7)

Panel 2 (1973-2005)
Intercept Male Male by Year SES SES by Year Adj. R Square Number of Cases -2.18*** 0.49*** -0.30*** 0.94*** -0.09*** 0.19 18,280 (634.1) (58) (42.9) (908.2) (18.2) 0.98*** -0.12*** 0.18 9,484 (605.9) (18.5) 0.87*** (277.4) -0.04 0.19 8,760 (1.6) -1.65*** (264.5) -2.23*** (331.7)

Note: Logistic Regression Coefficients * 0.01<P<0.05, ** 0.001 <P<0.01 *** P<0.001 (Wald Chi-Square). SES is a standardized sheaf variable comprising fathers occupational status and fathers and mothers education. For Interactions, Year centered at 1984 and then divided by 10. Men scored 1 and women 0. Fathers occupational status centered at mean and divided by 10. Estimates control for year of survey.

31

Table 3: Effects of Socioeconomic Background, Gender and Years of Education on Occupational Status (ISEI) Over Time

Men and Women

Men and Women

Men

Women

Panel 1 (1965-2005)
Intercept Male Age Male by Age Male by Year Fathers Occup. Status (FSEI) FSEI by Age FSEI by Year Years of Education Years of Education by Age Years of Education by Year Adj. R Square Number of Cases 0.12 18,411 45.57*** (116.9) 0.82** -1.24 0.81 -1.28 3.15 0.12 -0.43
*** *** *** *** ***

43.63*** (123.3) 0.08 0.51 0.61 -0.80 1.41

** ** *** ***

43.16*** 1.12***

(86.7) (8.2)

44.10*** (119) 0.45* (2.5)

(3.2) (-6.8) (3.4) (-5.8) (40.5) (1.5) (-7.0)

(0.4) (2.9) (2.8) (-4.1) (18.7) (1.9) (-6.2) (64.8) (-5.0) (6.3) 1.61*** 0.17 -0.30 2.59 -0.20 0.21 0.35 11,337
*** *** *** ***

(16.5) (1.7) (-4.1) (53.3) (-4.3) (5.9)

1.11*** (8.7) 0.05 -0.34 2.37 -0.21 0.15 0.30 6,940

*** *** ** **

0.14 -0.37 2.52 -0.19 0.18 0.33 18,295

*** *** *** ***

(0.4) (-3.3) (34) (-3.2) (2.8)

Panel 2 (1973-2005)
Intercept Male Age Male by Age Male by Year SES SES by Age SES by Year Years of Education Years of Education by Age Years of Education by Year Adj. R Square Number of Cases 0.12 12,549 46.61*** (95.5) 1.40*** (4.1) -1.13 1.03 -1.55
*** *** *** ***

43.84*** (96.8) 0.49 0.66 0.68 -0.93

** ** *** ***

43.69*** (71.3) 1.38*** (7.3)

44.49*** (75.3) 0.56* (2.5)

(1.6) (3.2) (2.6) (-3.6) (12.1) (2.5) (44.8) (-5.5) (4.8) 2.59*** (12.2) 0.32 (1.6) -0.59** 2.52 -0.28 0.23 0.35 7,345
*** *** ***

(-5.2) (3.6) (-5.2) (33.7) (2.2)

5.65 0.32*

2.10 0.39* 2.46 -0.27 0.20 0.32 12,507

1.15*** (3.7) 0.35 (1.5) -0.11 2.32 -0.29 0.17 0.28 5,145
*** *** *

-0.90*** (-6.2)

-0.55*** (-3.8)
*** *** ***

(-3.2) (38.5) (-4.6) (4.5)

(-0.5) (21.6) (-3.4) (2.2)

Note: Ordinary Least Squares Regression Coefficients. 0.05<P<0.10 * 0.01<P<0.05, ** 0.001 <P<0.01 *** P<0.001 (T Ratios). SES is a standardized sheaf variable comprising fathers occupational status and fathers and mothers education. Age, Year of Study, fathers occupational status, centered at 45, 1984 and 40 respectively, and then divided by 10.Years of Education centered at 10 years. For male, men scored 1 and women 0. Socioeconomic background includes fathers occupational status and fathers and mothers education. Estimates control for Year of Survey.

32

Table 4: Effects of Socioeconomic background, Gender and a University Degree on Occupational Status (ISEI) Over Time

Men and Women

Men and Women

Men

Women

Panel 1 (1965-2005)
Intercept Male Age Male by Age Male by Year Fathers Occupational Status (FSEI) FSEI by Age FSEI by Year University Degree University Degree by Age University Degree by Year Adj. R Square Number of Cases 0.12 18,411 45.57*** (116.9) 0.82** (3.2) -1.24*** (-6.8) 0.81 -1.28
*** *** ***

43.66*** (116.3) 0.40 (1.7) -0.33 0.53 -0.84 2.05

* *** ***

43.65*** (80.6) 0.26 (1.8)

44.03*** (92.6) -0.46* (-2.5)

(-1.9) (2.4) (-4.2) (27.8)

(3.4) (-5.8) (40.5) (1.5) (-7.0)

3.15 0.12 -0.43

2.29*** (24.1) 0.34*** -0.42 19.02 -1.40 -0.80 0.30 11,302

*** *** ** *

1.74*** (13.9) 0.19 -0.59 17.33 -0.33 -1.21 0.25 6,927

* *** ***

0.31*** (4.1) -0.53 18.38 -0.85 -1.06 0.28 18,247

*** *** * ***

(3.6) (-5.8) (43.4) (-3.3) (-2.5)

(1.6) (-5.6) (26.1) (-0.6) (-2.4)

***

(-9.1) (50.9) (-2.5) (-4.0)

Panel 2 (1973-2005)
Intercept Male Age Male by Age Male by Year Socioeconomic Background (SES) SES by Age SES by Year University Degree University Degree by Age University Degree by Year Adj. R Square Number of Cases 0.12 12,549 46.61*** (95.5) 1.40*** (4.1) -1.13 1.03 -1.55 5.65
*** *** *** ***

44.48*** (93.7) 0.82* -0.17 0.73 -0.96 3.67

** *** ***

44.63*** (67.8) 0.69*** (3.5)

45.06*** (73.8) -0.37 (-1.7)

(2.5) (-0.8) (2.7) (-3.5) (22.4) 4.17*** (20.6) 0.69*** -0.97 17.34 -1.95 -0.03 0.30 7,317
*** *** ***

(-5.2) (3.6) (-5.2) (33.7) (2.2) (-6.2)

2.70*** (9.4) 0.58* -0.71 15.90 -0.67 -0.52 0.25 5,133

** ***

0.32* -0.90
***

0.71*** (4.8) -1.03 16.72 -1.30 -0.27 0.27 12,467

*** *** ***

(3.6) (-5.5) (28.5) (-3.9) (-0.1)

(2.5) (-3.0) (17.4) (-1.1) (-0.8)

(-7.4) (33.0) (-3.3) (-0.7)

Note: Ordinary Least Squares Regression Coefficients. 0.05<P<0.10, * 0.01<P<0.05, ** 0.001 <P<0.01, *** P<0.001 (T Ratios). SES is a standardized sheaf variable comprising fathers occupational status and fathers and mothers education. Age, Year of Study, fathers occupational status, centered at 45, 1984 and 40 respectively, and then divided by 10. For male, men scored 1 and women 0. Socioeconomic background includes fathers occupational status and fathers and mothers education. Estimates control for Year of Survey.

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Table 5: Effects of Socioeconomic background, Gender and Education on Earnings (Logged 1990 dollars) Over Time 1984-2005

Men and Women

Men and Women

Men

Women

Panel 1 (Years of Education)

Intercept Male Age Age Squared Hours worked per week Male by Age Male by Year SES SES by Age SES by Year Years of Education Years of Education by Age Years of Education by Year Adj. R Square Number of Cases 0.18 8,973 -0.04 -0.06 0.10 -0.03
** ***

9.53*** (262) 0.73*** (21.7) 0.19*** (5.5) -0.06*** (-6.0) (-1.9) (-2.7) (5.7) (1.8) (-2.6)

9.57*** (284.3) 0.45*** (14.8) 0.18*** (5.8) -0.04*** (-4.4) 0.19 -0.04 0.04 0.01 -0.02 0.07 -0.01 0.00 0.34 8,607
* *** * ***

10.14*** (334.6) 0.16*** 0.10

***

9.54*** (208.1) 0.22*** (4.6) -0.05** 0.28

***

(4.3) (9.0)

-0.05*** (-4.1)

(-3.2) (28.4)

(26.3) (-1.9) (-2.2) (2.2) (0.7) (-2) (12.6) (-2.5) (-0.1)

-0.03
* *

0.07*** 0.00 -0.04 0.06 -0.01 0.00 0.12 4,952

** ***

(3.5) (0.4) (-2.8) (9.0) (-1.6) (0.1)

-0.02 0.01 0.01 0.09 -0.01 -0.01 0.35 3,655

*** *

(-0.6) (0.8) (0.5) (9.3) (-2.2) (-1.2)

0.02
**

Panel 2 (University Degree or Higher)

Intercept Male Age Age Squared Hours worked per week Male by Age Male by Year SES SES by Age SES by Year University Degree University Degree by Age University Degree by Year Adj. R Square Number of Cases 0.31 8,608 9.69*** (303.4) 0.44*** (14.2) 0.13*** (4.2) -0.04 0.20
*** ***

9.94*** (222.4) 0.44*** (14.4) 0.14*** (4.5) -0.04 0.19

*** ***

10.19*** (359.2) 0.12*** -0.04 0.10

*** ***

9.65*** (224.2) 0.15** -0.04 0.28

** ***

(3.5) (-3.9) (8.9)

(3.2) (-2.7) (28.2)

(-3.9) (26.7) (-1.4) (-2.6) (1.3) (-2.6)

(-4.0) (26.1) (-1.8) (-2.1)

-0.02 -0.05** 0.01 -0.02

**

-0.03 -0.04* 0.01

***

0.09*** (6.1)

0.07*** (4.3) (1.4) -0.03 (-3.5) *** 0.32 (9.6) 0.00 0.00 (0) (0.1)

0.10*** 0.01
***

(4.6) (1.1)

0.03 0.01

(1.4) (0.9)

-0.05 (-3.6) *** 0.31 (7.2) -0.01 -0.01 (-0.3) (-0.2)

-0.01 (-0.9) *** 0.37 (6.6) 0.01 -0.02 0.35 3,655 (0.4) (-0.6)

0.38 0.19 8,607 4,952 Note: Ordinary Least Squares Regression Coefficients. 0.05<P<0.10, * 0.01<P<0.05,

0.001 <P<0.01, *** P<0.001 (T Ratios). Earnings standardized to $ 1990 and then logged. Age range restricted 30 to 65. Age, Year of Study, fathers occupational status, hours, centered at 30 (because of quadratic term), 1984, 40 and 35 respectively, and then divided by 10. Years of Education centered at 10 years. For male, men scored 1 and women 0. Socioeconomic background includes fathers occupational status and fathers and mothers education. Estimates control for Year of Survey.

**

34