Socioeconomic Inequalities

Modernization Theory and Changes Over Time in the
Reproduction of Socioeconomic Inequalities in Australia

Gary N. Marks, Melbourne Institute of Applied Economic and Social Research
Modernization theory argues that, as societies industrialize and further develop, the
influence of social background and other ascribed characteristics on educational and
socioeconomic outcomes declines, while achievement in the education system be-
comes more important. The purpose of this research is to investigate propositions
derived from modernization theory as they apply to Australian society during the
second half of the 20th century. Specifically, these are (1. declines in the influence
of socioeconomic background on education, occupation and earnings; (2. increases
in the occupational and economic returns to education; and (3. decreases in gender
inequalities in all three outcomes. These propositions are examined using data from
nationally representative surveys conducted from 1965 through 2005. In accordance
with modernization theory, it was found that the effects of socioeconomic background
on education, occupational attainment and earnings have declined. Gender inequali-
ties 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.
Introduction
A central concern in sociology is the intergenerational reproduction of socio-
economic 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 socioeco-
nomic 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 low
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 back-
ground. 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.
This article was no doubt much improved through detailed and constructive comments from the
anonymous referees. I would also like to thank Harry Ganzeboom for advice on the data and its
analysis. Direct correspondence to Gary N. Marks, Research Associate-Associate Professor, Melbourne
Institute of Applied Economic and Social Research, Level 7 161 Barry St., University of Melbourne
Victoria 3010 Australia. E-mail: gmarks@unimelb.edu.au.
© The University of North Carolina Press Social Forces 88(2) 917–944, December 2009
918 • Social Forces 88(2)
The purpose of this study 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 for this research 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 socioeconomic outcomes (Blau and Duncan 1967; DiPrete
and 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 and Hout 2006); and specific government policies aimed
at increasing equality of opportunity in education (see Paterson and 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 emphasizing different social
processes. However, before adjudicating on the importance of particular social
processes, the veracity of the general propositions of modernization theory
needs to be established. The counter to modernization theory – reproduction
theory, which also has many diverse strands accompanied by differing explana-
tions – is based on the assumption that the intergenerational reproduction of
socioeconomic inequalities is 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 inequali-
ties (Breen and 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 father’s occupational status on son’s
occupational status.
Modernization and Socioeconomic Inequalities in Australia • 919
• 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.
Treiman’s propositions require some updating. For example the focus on in-
dustrialization, which if defined in terms of the proportions of adults engaged in
agriculture and industrial production, occurred a long time ago for contemporary
developed societies and should be replaced by “modernization.” Processes such as
urbanization, educational expansion and bureaucratization are ongoing so, hypo-
thetically, are likely to further reduce the reproduction of socioeconomic inequali-
ties. Furthermore, Treiman’s 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 because modernization theory is primarily about
the labor market. The increasing penetration of bureaucratic selection and promo-
tion procedures, the decline of the family firm and government policies prohibit-
ing discrimination should have had effects primarily on the labor market.
The following discussion reformulates and extends Treiman’s (1970) proposi-
tions about the relationships involving socioeconomic background, education,
occupation and earnings (Figure 1).
According to the modernization thesis, the impact (relationship i in Figure 1)
of socioeconomic background on education should decline, although the mecha-
nism for this is unclear. Possible mechanisms include more meritocratic assessment
criteria, the expansion of education to higher levels, the increasing educational
Figure 1: Model of the Relationship between Socioeconomic Background,

Education, Occupation and Earnings
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 pro-
cesses are unclear but include declines in the tradition of sons following in their
father’s occupation and in the intergenerational viability of small-scale family busi-
nesses, 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 reason as that for the hypothesized decline in the effect
of socioeconomic background on occupation. Employers are unlikely to pay a pre-
mium to employees from more privileged socioeconomic backgrounds, net of edu-
cational 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 education – labor market relationship (iii in Figure 1) is an ambiguous
relationship in modernization theory. A stronger relationship could be argued
as evidence for modernization theory. If higher educational qualifications mean
greater skills and hence productivity, employers will reward higher levels of educa-
tion, 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 sta-
ble 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 in-
creases would not be consistent with the main tenants of modernization theory.
It is noteworthy that Treiman (1970) 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 educa-
tional attainment on subsequent socioeconomic outcomes such as, 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)
observes that virtually all pre-industrialized societies had strictly defined gender
roles that more or less excluded women from the public economic sphere. In
Western countries, women typically had less education than men (Jonsson et al.
1996; Shavit and Blossfeld 1993). Over the past 50 years women in industrial-
ized countries have become more educated and, in almost all Western countries
have increasingly participated in the workforce. One of the principal aims of the
feminist movement is equality in the labor market, allowing women to become
financially independent. This involves changes in social norms about women’s
education and careers and specific legislation designed to improve women’s educa-
tional and labor market outcomes. In addition, there are other social forces at work
increasing women’s 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 fe-
male 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 gender equality in the labor market.
The Australian Context

In Australia, a number of policies and judicial decisions, aimed at reducing the
reproduction of socioeconomic and gender inequalities in education and the labor
market, have been enacted.
In education, the most notable policy was the abolition of university fees in
1974 by the 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
and 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 percent 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 through a government-sponsored
deferred payment scheme, the Higher Education Contribution Scheme. At its in-
troduction and whenever the HECS system is amended (which invariably involves
some fee increases), critics argue that HECS will increase socioeconomic inequali-
ties in higher education. However, because it is a deferred payment scheme (repay-
ment is through the tax system and commences after personal 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 suitable place.
Socioeconomic inequalities in educational outcomes at the primary and sec-
ondary school levels remain a policy focus for both federal and state govern-
ments. 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. 2000). In contrast to the university sector, 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 past 10 years or so there has been
a shift to policies on improving the educational outcomes of boys (Ailwood and
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 and Meng 1997).
More generally, Australian governments of both political persuasions have
implemented neo-liberal (or economic rationalist) policies since 1983. These
include, floating the Australian dollar, deregulating various industries and en-
couraging competition, selling government owned enterprises (such as Qantas
Airways, Commonwealth Bank and Telstra), reducing the role of centralized wage
fixing, welfare reform (encouraging welfare recipients to enter the work force), free
trade deals with various countries 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 and Manne 1991;
Pusey 2003). Furthermore, it is argued with only limited evidence that such poli-
cies are particularly detrimental to women (Van 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 cate-
gorical measures of occupational class or group. Although the impetus for Lipset
and Zetterberg’s (1959) cross-national comparison of occupational mobility
was modernization theory, they found that somewhat surprisingly, the rates of
absolute mobility in the United States – the archetypal modern society – were

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 mod-
ernization theory. This conclusion of trendless fluctuation was becoming the
general consensus until Breen’s (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 from the mid-1960s through the early 1990s, but the changes were
relatively small (Jones et al. 1994; Marks and Jones 1991).
Again contrary to the predictions of modernization theory, Shavit and
Blossfeld’s (1993) edited collection concluded that the relationship between so-
cioeconomic background and education in most industrialized countries had
not declined. This conclusion of “persistent inequality” has much to do with the
particular methodological approach, 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 per-
sistent inequality (in the transition process) in the face of educational expansion
(Raftery and Hout 1993). In contrast, declines over time in the overall (linear)
relationship between socioeconomic background and educational attainment
are found in most developed countries (Rijken 1999; also various chapters
in Shavit and Blossfeld 1993). Returning to the conclusion of persistent in-
equality in educational transitions, Breen and Jonsson (2005) cite a number
of subsequent studies which show a trend toward equalization. In a reanalysis
with more data and using a different methodological approach, Breen et al. (2009)
found declines in the influence of socioeconomic background on educational at-
tainment in Sweden, the Netherlands, Britain, Germany and France.
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 from the mid-1980s through 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 bachelor degree (Marks and McMillan
2007). There is no indication that the implementation of, or reforms to, HECS
increased socioeconomic inequalities in university participation (Marks 2009;
Marks and 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
father’s occupation (Blau and Duncan 1967; Halsey et al. 1980). In Australia,
a much stronger effect for education than father’s occupation on occupational
destinations was found in data collected as long ago as 1965 (Broom and Jones
1976). Broom et al. (1980) 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 and 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 and
Jones 1976). Marks (1992) found an increase in the influence of education on
occupational attainment 1965-1990 and declines in the influence of father’s oc-
cupational 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 educa-
tion. In Australia, the rate of return is 5 to 8 percent (McNabb and 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, about 10 percent.
Although the returns to earnings from education is increasing in the United
States (Autor, Katz and Kearney 2008), there are only small increases or no
increase at all in other countries (Burbidge et al. 2002; Gottschalk and Joyce
1998). Gottschalk and Joyce (1998) found that Australia ranked fourth (of 12
countries) in the increase in education premium during the period 1985-1989,
which followed a much smaller increase during the early 1980s. Borland (2002)
concluded that a three-year bachelor degree increases earnings by 14 to 18
percent, noting that this estimate was not higher than those of earlier studies.
The one study on earnings mobility in Australia, using father’s occupation
as a proxy for father’s 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. 2000). Multivariate analyses of trend data also show strong declines
in the effect of being male on both school completion and university participation
(Marks and McMillan 2003, 2007). Decline and reversal of gender differences
in education have also occurred in many other countries (Blossfeld and Shavit
1993; OECD 1996). 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 such as gender should have
little or no bearing on job earnings or at least, gender differences should be declin-
ing. The gender gap in earnings in Australia is narrowing. According to the OECD
(2001), the difference in Australia in the male-female gap in full-time median
earnings as a percentage of male full-time earnings has declined from 22 percent
in 1975 to 14 percent 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 and Shannon 2002, 2001). Most likely, much
of this decline can be attributed to women’s increasing educational attainment
and workforce experience. Kidd and Xin (1997) suggest that anti-discrimination
legislation made little impact because the decline in the gender gap was slower
during the 1980s (after the legislation was enacted) than the 1970s.
Data, Measures and Analyses

The analyses of the adult population used data collected from 1965 through 2005
from nine cross-sectional surveys and one household panel. The surveys comprise
the 1965 Social 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 and Evans
1999) and the 2005 wave of the Household, Income and Labour Dynamics of
Australia 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 ad-
ministered by mail.3 The 1965 Social Stratification survey did not collect data on
women’s 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 in their respective populations has been demonstrated
in various publications (Aitkin 1982; Bean 1991; Broom and Jones 1976; Broom
et al. 1980; Evans and Kelley 2002a; Evans and 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 one randomly selected adult ages 18 or
older 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 be-
tween 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 time per-
formance largely determines university entrance and other post-school pathways.
The measure of years of education is simply years of formal education (includ-
ing university and post-graduate education but excluding preschool education)
ranging from 0 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 1 for
a university qualification (three-year bachelor degree or higher) and 0 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 stand-
ing” and that occupation is the single most important dimension of social interac-
tion. 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 more difficult with categorical or multidimensional
measures of social standing especially in the multivariate context.
For this study occupational status was measured by the International
Socioeconomic Index. Responses to the questions on occupations were coded
according to the International Standard Classification of Occupation 1988, as
provided by the International Labor Office. ISCO88 is a four-digit hierarchical
coding schema comprising 390 different occupational categories. 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 through 90. Examples of the scores assigned to occupa-
tions are: medical practitioners (88), judges (90), teachers (69), cooks (30), police
officers (50) and farm hands (16) (see Ganzeboom and 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 obtained from the 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: a single in-
dicator measure and a composite measure. Conclusions on trends based on
a single indicator of socioeconomic background may be misleading because
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 father’s occupa-
tional status (ISEI scores). The second was a composite measure of SES. The occu-
pational 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. Because the analyses of earnings covered a shorter time frame (1984-
2005), only the SES measure was used.
The composite SES measure comprises father’s occupational status (ISEI score),
and father’s and mother’s education. Father’s and mother’s education were mea-
sured 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 (father’s
ISEI, and mother’s and father’s 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 datasets,
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 0 and a standard deviation of 1.
Continuous independent variables have been centered because several are used
to construct interaction terms, and centering reduces the possibility of severe
multicollinearity in which the estimates become unstable (Aiken and West 1991).
Also with centering, the estimated coefficients for the main effects usually refer to
meaningful values rather than the meaningless score of zero on variables such as fa-
ther’s occupation, education and age. In addition, the intercept is more meaning-
ful with centering because it is an estimate of the score on the dependent variable
for respondents scoring 0 (the mean or an assigned score) on all the independent
variables. For these analyses, year of study was centered about the year 1984;
father’s SEI score at 40, age at 45 and 30 for the analyses of occupational status
and earnings5 respectively; and hours worked was centered at 35 hours per week.
Year, age and hours worked were further transformed by dividing by 10 so that a
unit difference would be 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 from 1 through 70; if hours worked was greater than 70
hours per week the value was recoded to 70 hours.
Gender was measured by assigning a score of 1 to men and 0 to women. Thus
the coefficient for gender indicates the average difference between men and wom-
en on the respective dependent variable. All analyses include dummy variables for
the year of the study (estimates not shown) not only to take into account general
increases over time in educational attainment and smaller increases in occupa-
tional status,6 but also to take into account differences in study design.
Analyses
The analyses of occupational status and earnings were restricted to respondents
ages 30-65 at the time of the study because, in stratification research, 30 is general-
ly 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 26-75, 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 back-
ground, gender and education interaction terms were constructed with the con-
tinuous (centered) measure of year of study. In the analysis of occupational status
and earnings, interaction terms between age and 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 age.
It should be noted that these model specifications include a number of chal-
lengeable 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 propo-
sitions 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 back-
ground, but both influence educational outcomes (Conley 2001; Jencks et al.
1979, 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 and Gittleman 2003; Blau
1999; Ganzach 2000; Plug and 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. Because
the data here do not contain a measure of ability, these analyses are based on the
assumption that the effects of ability remained more or less constant over the
time period investigated.8 If ability were included, the effects for socioeconomic
background on these dependent variables would be much smaller.
Apart from the analyses of a university qualification, the data were 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 earnings, earnings were logged,
a common practice in the analysis of earnings, income and wealth because it
reduces the influence of extreme values. In the text, the coefficients are discussed
as percentage effects.9 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 devel-
oped for logistic models. Note that the R-square values for logged earnings may
be misleading because the variation has been compressed. 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 information.
Results
Education
Table 1 provides evidence of a substantial decline in the influence of socioeconomic

background on years of education. The effect of father’s occupational status (Panel
1) is declining by about .06 of a year of education (or about 8 percent of the main
Table 1: Effects of Socioeconomic Background and Gender on Years of Education Over Time
Men and Women Men Women
Panel 1 (1965-2005)
Intercept 10.63*** (150.9) 11.17*** (101.9) 10.46*** (122.6)
Male .41*** (9.0)
Male by Year -.12*** (-3.8)
Father’s Occupational Status .75*** (53.9) .77*** (43.0) .71*** (31.3)

Father’s Occupational Status by Year -.06*** (-6.1) -.06*** (-4.7) -.05** (-3.0)
R Square .18 .18 .19
Number of Cases 26,537 14,274 11,776
Panel 2 (1973-2005)
Intercept 11.07*** (134.4) 11.63*** (90.9) 10.99*** (110.6)
Male .56*** (9.8)
Male by Year -.22*** (-5.5)
is stronger among men than women.
Socioeconomic Background 1.70*** (50.2) 1.76*** (38.3) 1.61*** (32.1)

SES by Year -.22*** (-9.8) -.28*** (-8.8) -.14*** (-4.4)
R Square .26 .24 .28
Number of Cases 18,319 9,559 8,724
Notes: Ordinary Least Squares Regression Coefficients: *.01 < P < .05 **.001 < P < .01 ***P < .001
(T Ratios). SES is a standardized sheaf variable comprising father’s occupational status and father’s
and mother’s education. For Interactions, Year centered at 1984 and then divided by 10. Men scored 1
and women 0. Father’s occupational status centered at 40 and divided by 10. Estimates control for year
of survey.
Panel 2) for gender shows that in 1984 men had, on average, over half a year more
education per decade is about 13 percent of its effect in the 1984 study. Separate
of a year (.75 years). Twenty-one years later, in 2005, the (calculated) effect is
father’s occupational status increases average years of education by three-quarters
analyses by gender show that the decline in the effects of SES on years of education
effect in 1984) per decade. Column 1 shows that, in 1984, a 10-unit increase in
Table 1 also shows changes in the effects of gender. The coefficient of .56 (in
education) on educational attainment also declined. The estimate of .22 years of
SES is a composite of father’s occupation, and both father’s and mother’s years of
lower, at .62 years. Panel 2 also shows a decline in the impact of SES (recall that
education than women. The significant interaction term shows that the gender
Table 2: Effects Socioeconomic Background and Gender on University Education Over Time
Men and Women Men Women
Panel 1 (1965-2005)
Intercept -2.36*** (1024.0) -1.90*** (458.4) -2.50*** (528.7)
Male .43*** (55.9)
Male by Year -.22*** (36.7)
Father’s Occupational Status .45*** (1045.0) .46*** (741.0) .44*** (285.3)
Father’s Occupational Status by Year -.03** (10.6) -.03* (6.2) -.03 (2.7)
Pseudo R Square .15 .14 .15
Number of Cases 26,480 14,646 11,797
Panel 2 (1973-2005)
Intercept -2.18*** (634.1) -1.65*** (264.5) -2.23*** (331.7)
Male .49*** (58.0)
Male by Year -.30*** (42.9)
Socioeconomic Background .94*** (908.2) .98*** (605.9) .87*** (277.4)
SES by Year -.09*** (18.2) -.12*** (18.5) -.04 (1.6)
Pseudo R Square .19 .18 .19
Number of Cases 18,280 9,484 8,760
Notes: Logistic Regression Coefficients: *.01 < P < .05 **.001 < P < .01 ***P < .001 (Wald Chi-
Square). SES is a standardized sheaf variable comprising father’s occupational status and father’s
and mother’s education. For Interactions, Year centered at 1984 and then divided by 10. For ‘Male’
men scored 1 and women 0. Father’s occupational status centered at 40 and divided by 10. Estimates
control for year of survey.
are linear, the gender difference will have nearly disappeared 25 years later.
difference is declining by about a fifth of a year per decade. So assuming the trends
composite SES measure (Panel 2). In 1984, a one standard deviation increase
by about 7 percent per decade (Panel 1, Table 2). As was the case in the analysis
of years of education, a stronger decline (around 10 percent) was found with the
The findings are very similar for a university qualification (Table 2). The effect
in socioeconomic background increased the odds of a university qualification

(as opposed to not having a university qualification) 2.6 times. Twenty years
of father’s occupational status on obtaining a university qualification is declining
later, the odds have declined to 2.1. The separate gender analyses indicate that
of socioeconomic background on university education has declined. The impact
the decline in the effect of socioeconomic background on a university qualifica-

Table 3: Effects of Socioeconomic Background, Gender and Years of Education on Occupational Status
Over Time
Men and Women Men and Women Men Women
Panel 1 (1965-2005)
Intercept 45.57*** (116.9) 43.63*** (123.3) 43.16*** (86.7) 44.10*** (119.0)
Male .82** (3.2) .08 (.4)
Age -1.24*** (-6.8) .51** (2.9) 1.12*** (8.2) .45* (2.5)

Male by Age .81*** (3.4) .61** (2.8)
statistically significant.
Male by Year -1.28*** (-5.8) -.80*** (-4.1)

Father’s Occupational Status 3.15*** (40.5) 1.41*** (18.7) 1.61*** (16.5) 1.11*** (8.7)
FSEI by Age .12 (1.5) .14† (1.9) .17 † (1.7) .05 (.4)
FSEI by Year -.43*** (-7.0) -.37*** (-6.2) -.30*** (-4.1) -.34*** (-3.3)
Years of Education 2.52*** (64.8) 2.59*** (53.3) 2.37*** (34.0)
Years of Education by Age -.19*** (-5.0) -.20*** (-4.3) -.21** (-3.2)
Years of Education by Year .18*** (6.3) .21*** (5.9) .15** (2.8)
Adjusted R Square .12 .33 .35 .30
Number of Cases 18,411 18,295 11,337 6,940
Panel 2 (1973-2005)
Intercept 46.61*** (95.5) 43.84*** (96.8) 43.69*** (71.3) 44.49*** (75.3)
a university degree had disappeared 20 years later.
Male 1.40*** (4.1) .49 (1.6)

Age -1.13*** (-5.2) .66** (3.2) 1.38*** (7.3) .56* (2.5)
Male by Age 1.03*** (3.6) .68** (2.6)
Male by Year -1.55*** (-5.2) -.93*** (-3.6)
Socioeconomic Background 5.65*** (33.7) 2.10*** (12.1) 2.59*** (12.2) 1.15*** (3.7)
SES by Age .32* (2.2) .39* (2.5) .32 (1.6) .35 (1.5)
SES by Year -.90*** (-6.2) -.55*** (-3.8) -.59** (-3.2) -.11 (-.5)
Years of Education 2.46*** (44.8) 2.52*** (38.5) 2.32*** (21.6)
Years of Education by Age -.27*** (-5.5) -.28*** (-4.6) -.29*** (-3.4)
Years of Education by Year .20*** (4.8) .23*** (4.5) .17* (2.2)
Number of Cases 12,549 12,507 7,345 5,145
Changes over time in gender differences in university qualifications are more
women. However in both panels, the large negative coefficients for the interaction
terms relative to the main effects indicate that the gender gap in having obtained
in 1984 the odds of men having a university qualification were 1.5 times that of
striking than that for years of education. The effect of .43 for males indicates that
tion is stronger among men than women and the decline among women is not
Occupation
The total or overall effect of socioeconomic background on occupational attain-

ment has also declined. The effect of father’s occupational status has declined .4
ISEI units (about 14 percent) per decade (Column 1, Table 3). In 1984, a 10-
ISEI unit difference in father’s occupational status was associated with a differ-
ence of about 3.2 ISEI units in occupational status. Some 10 and 20 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 percent per decade.
The addition of education to the model substan-
tially increased the explained variation from 12 to 32
Education centered at 10 years. For Male, men scored 1 and women 0. Estimates control for Year of Survey.
(or 33) percent (Table 3) consistent with the general

variable comprising father’s occupational status and father’s and mother’s education. Age, Year of Study,
conclusion that education has a much stronger impact

†.05 < P < .10 *.01 < P < .05 **.001 < P < .01 ***P < .001 (T Ratios). SES is a standardized sheaf
father’s occupational status, centered at 45, 1984 and 40 respectively, and then divided by 10.Years of
on occupational attainment than socioeconomic back-

ground. The decline in the effects of socioeconomic
background was also evident when controlling for
education because both the interactions of father’s oc-
cupational 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 father’s occupational status on occupational attain-
ment, but no significant decline with the broader SES
measure. This implies that there was no decline in the
effects of father’s and/or mother’s education among
women on occupational attainment.
Notes: Ordinary Least Squares Regression Coefficients.
Consistent with one variant of modernization theory,

the effect of years of education on occupational attain-
ment is increasing over time among both sexes. This ef-
fect was evident in both sets of analyses using different
measures (Table 3). The increase is fairly substantial ris-
ing by 8 percent per decade. Thus, occupational attain-
ment 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 15 to 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 for the by-year interac-
Table 4: Effects of Socioeconomic Background, Gender and a University Degree on Occupational Status
Over Time
Earnings
Panel 1 (1965-2005)
Intercept 45.57*** (116.9) 43.66*** (116.3) 43.65*** (80.6) 44.03*** (92.6)
Male .82** (3.2) .40† (1.7)
Age -1.24*** (-6.8) -.33† (-1.9) .26† (1.8) -.46* (-2.5)

Male by Age .81*** (3.4) .53* (2.4)
Male by Year -1.28*** (-5.8) -.84*** (-4.2)
Father’s Occupational Status 3.15*** (40.5) 2.05*** (27.8) 2.29*** (24.1) 1.74*** (13.9)
FSEI by Age .12 (1.5) .31*** (4.1) .34*** (3.6) .19 (1.6)
FSEI by Year -.43*** (-7.0) -.53*** (-9.1) -.42*** (-5.8) -.59*** (-5.6)
University Degree 18.38*** (50.9) 19.02*** (43.4) 17.33*** (26.1)
University Degree by Age -.85* (-2.5) -1.40** (-3.3) -.33 (-.6)
University Degree by Year -1.06*** (-4.0) -.80* (-2.5) -1.21* (-2.4)
Number of Cases 18,411 18,247 11,302 6,927
Panel 2 (1973-2005)
Male by Year interaction terms in tables 3 and 4.
Intercept 46.61*** (95.5) 44.48*** (93.7) 44.63*** (67.8) 45.06*** (73.8)

Male 1.40*** (4.1) .82* (2.5)
Age -1.13*** (-5.2) -.17 (-.8) .69*** (3.5) -.37† (-1.7)
Male by Age 1.03*** (3.6) .73** (2.7)
Male by Year -1.55*** (-5.2) -.96*** (-3.5)
Socioeconomic Background 5.65*** (33.7) 3.67*** (22.4) 4.17*** (20.6) 2.70*** (9.4)
SES by Age .32* (2.2) .71*** (4.8) .69*** (3.6) .58* (2.5)
SES by Year -.90*** (-6.2) -1.03*** (-7.4) -.97*** (-5.5) -.71** (-3.0)
University Degree 16.72*** (33.0) 17.34*** (28.5) 15.90*** (17.4)
University Degree by Age -1.30*** (-3.3) -1.95*** (-3.9) -.67 (-1.1)
University Degree by Year -.27 (-.7) -.03 (-.1) -.52 (-.8)
Number of Cases 12,549 12,467 7,317 5,133
cioeconomic background (measured by SES) on earnings. The effect declined
declining indicated by the negative and statistically significant coefficients for the
revealed that the increase in the returns to occupational attainment from years
years in post-school education. Gender differences in occupational attainment are

of education was from years of education at school (up to 12 years) rather than
tion terms were consistently negative (but small). Further analysis (not shown)
The earnings analyses also indicate a substantial decline in the total effect of so-
by 30 percent each decade without controlling for hours worked and 18 percent
per decade controlling for hours worked (Column 1, panels 1 and 2, Table 5).
However, socioeconomic background is not a strong predictor of earnings.10 The
negative interaction effect between socioeconomic background and year of study
remained statistically significant when controlling for education among men but
not among women for whom the effects are not statistically significant.
Table 5 indicates that gender differences in earnings are declining over time,
but substantial differences remain. In 1984, men earned, on average, twice as
much (more than 100 percent) as women when not taking into account hours
worked per week (calculated from Column 1, Panel 1) and 55 percent 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 percent. According to analyses presented in
father’s occupational status, centered at 45, 1984 and 40 respectively, and then divided by 10. For Male, men
Table 5 (Column 1, Panel 2), the gender gap in earnings

†.05 < P < .10 *.01 < P < .05 **.001 < P < .01 ***P < .001 (T Ratios). SES is a standardized sheaf
variable comprising father’s occupational status and father’s and mother’s education. Age, Year of Study,
(net of hours worked) is declining by about 11 percent

per decade. The estimates for gender and the interaction
term between gender and year of study did not substan-
tially change with the addition of education (Column 2,
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
7-9 percent per year of education and 30 to 40 percent
scored 1 and women 0. Estimates control for Year of Survey.
for a university degree (which includes post-graduate and

Notes: Ordinary Least Squares Regression Coefficients.
honors degrees as well as three-year bachelor degrees).

These estimates are consistent with those in the literature.
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.
Conclusion
This study shows that the intergenerational reproduction
of socioeconomic inequalities in Australia has been declin-
ing. The effects of socioeconomic background (measured
in two different ways) on years of education, a university
qualification, occupational attainment and earnings have
Table 5: Effects of Socioeconomic Background, Gender and Education on Earnings (Logged 1990 dollars) Over
Time 1984-2005
Panel 1 (Years of Education)
Intercept 9.53*** (262.0) 9.57*** (284.3) 10.14*** (334.6) 9.54*** (208.1)
Male .73*** (21.7) .45*** (14.8)
Age .19*** (5.5) .18*** (5.8) .16*** (4.3) .22*** (4.6)

Age Squared -.06*** (-6.0) -.04*** (-4.4) -.05*** (-4.1) -.05** (-3.2)
Hours worked per week .19*** (26.3) .10*** (9.0) .28*** (28.4)
Male by Age -.04† (-1.9) -.03† (-1.9)
Male by Year -.06** (-2.7) -.04* (-2.2)
SES .10*** (5.7) .04* (2.2) .07*** (3.5) -.02 (-.6)
SES by Age .02† (1.8) .01 (.7) .00 (.4) .01 (.8)
SES by Year -.03** (-2.6) -.02* (-2.0) -.04** (-2.8) .01 (.5)
Years of Education .07*** (12.6) .06*** (9.0) .09*** (9.3)
Years of Education by Age -.01* (-2.5) -.01 (-1.6) -.01* (-2.2)
Years of Education by Year .00 (-.1) .00 (.1) -.01 (-1.2)
Number of Cases 8,973 8,607 4,952 3,655
Panel 2 (University Degree or Higher)
Intercept 9.69*** (303.4) 9.94*** (222.4) 10.19*** (359.2) 9.65*** (224.2)
Male .44*** (14.2) .44*** (14.4)
Age .13*** (4.2) .14*** (4.5) .12*** (3.5) .15** (3.2)
Age Squared -.04*** (-3.9) -.04*** (-4.0) -.04*** (-3.9) -.04** (-2.7)
Hours worked per week .20*** (26.7) .19*** (26.1) .10*** (8.9) .28*** (28.2)
Male by Age -.02 (-1.4) -.03† (-1.8)
Male by Year -.05** (-2.6) -.04* (-2.1)
Socioeconomic Background .09*** (6.1) .07*** (4.3) .10*** (4.6) .03 (1.4)
SES by Age .01 (1.3) .01 (1.4) .01 (1.1) .01 (.9)
SES by Year -.02** (-2.6) -.03*** (-3.5) -.05*** (-3.6) -.01 (-.9)
University Degree .32*** (9.6) .31*** (7.2) .37*** (6.6)
will only become apparent in the future, there are indications that the decline
in education have declined rapidly, and these analyses identified a decline in the
neo-liberal economic policies on the reproduction of socioeconomic inequalities

declined and for some outcomes, quite substantially. Similarly, gender differences
socioeconomic background and gender) on educational and other socioeconomic

outcomes is supported. Although it could be argued that the detrimental effects of
tion theory’s prediction of a decline in the influence of ascribed attributes (i.e.,
gender gap in earnings, although large differences remain. Therefore, moderniza-
in the importance of socioeconomic background will continue. According to

the Australian component of the OECD’s PISA study, the impact of socioeco-
nomic background on performance in reading, mathematics and science among
15-year-old students weakened in the years 2000-2006 (Thomson and De Bortoli
2008). Student achievement (as measured by test scores) has a strong relation-
ship with subsequent educational outcomes such as school completion (and non-
completion) and university entrance (Marks 2007; Marks et al. 2000; Marks and
McMillan 2003, 2007).
Further support for a major contention of
centered at 30 (because of quadratic term), 1984and 35 respectively, and then divided by 10. Years of Education centered
modernization theory is the finding that the

at 10 years. For Male, men scored 1 and women 0. Socioeconomic background includes father’s occupational status and
Notes: Ordinary Least Squares Regression Coefficients. †.05 < P < .10 *.01 < P < .05 **.001 < P < .01 ***P < .001
variable comprising father’s occupational status and father’s and mother’s education. Age, Year of Study, Hours worked,
(T Ratios). Earnings standardized to $ 1990 and then logged. Age range restricted 30 to 65. SES is a standardized sheaf
(.4)
(-.6)
effects of education on occupational attain-

ment are increasing. The increase in the ef-
fects of years of education can be attributed to
3,655
.01
-.02
.35
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
(-.3)
(-.2)
employees increasingly screened applicants

based on whether they have finished school.
The impact of education on occupational at-
4,952
-.01
-.01
.19
tainment increased more strongly among men

than among women.
However, an important proposition associ-
(.0)
(.1)
ated with modernization theory was not support-

ed: the hypothesized increase in the impact of
father’s and mother’s education. Estimates control for Year of Survey.
education on earnings. This finding suggests that

8,607
.00
.00
.38
the Australian labor market is not increasing the

premium paid to more-highly-educated work-
ers. There are several reasons why this may be
so: the demand for educated labor may be more
or less matching supply, or possibly changes in
the economic returns are quite heterogeneous,
8,608
.31
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 very
large increases since the 1960s in the proportion
University Degree by Year
University Degree by Age
of adults with a university degree.

In contrast, the major contentions of re-
Adjusted R Square
Number of Cases
production theory are not supported because

the effects of socioeconomic background are
declining and the effects of socioeconomic
background effects are quite weak for occupa-
tional attainment and earnings. Its effects on educational attainment would be

much weaker if ability was included in the models (for example see, Marks and
McMillan 2003, 2007).
This research 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.
Notes
1. An obvious but largely unspoken criticism of reproduction theory is that the
intergenerational transmission of socioeconomic inequalities is much weaker than
the theories assume. Typically less than 20 percent of the variation in educational and
socioeconomic outcomes is accounted for by socioeconomic background; with only
one indicator of socioeconomic background, such as father’s occupation or mother’s
education, this figure is about 10 percent in most industrialized countries.
2. Elasticity is the fraction of parental income transmitted from parents to their children.
It is simply the regression coefficient linking father’s or family’s logged income with
adult child’s logged income. The estimate for income elasticity in Australia by Leigh
(2007) was .2 and after correction between .2 and .3.
3. A mode effect was investigated and found not to change the substantive conclusions.
Analysis of the 1984-1999 data were run with and without data from the 1984 survey
to test the possibility of mode effects because 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 Warren’s (1997) concept of income-occupational status rather than
education-occupational status. This means that the effects of independent variables
on ISEI occupational status can be interpreted as effects on “average occupational
income.” However, such measures of occupational status are highly correlated with
other measures of occupational status, so they can be understood as general indicators
of socioeconomic standing.
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 signs after squaring. Because 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. Because 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 enrollment. Their
published estimates could be interpreted as a decline in the impact of wealth. For Poland,
Belbo and Lauer (2004) conclude that the reproduction of inequality across generations
is primarily caused by the transmission of human capital rather than by wealth effects.
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 occupational attainment and education
is indicated by the much smaller T ratio in the earnings analysis (about 6) compared
to T ratios of about 34 for occupation and more than 40 for education (Column 1
in tables 1-4). Using the method presented by Wolf (1986) that adjusts for sample
size, these are equivalent to standardized regression coefficients of .06, .29 and .35
for earnings, occupational attainment and education respectively.
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Socioeconomic Inequalities

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Socioeconomic Inequalities

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Modernization Theory and Changes Over Time in the

Reproduction of Socioeconomic Inequalities in Australia

The purpose of this study is to examine the reproduction of inequalities in

• The more industrialized a society, the smaller the

• The more industrialized a society, the greater the direct

Figure 1: Model of the Relationship between Socioeconomic Background,

The Australian Context

socioeconomic composition of the schools’ students (Ainley et al. 1995; Marks

absolute mobility in the United States – the archetypal modern society – were

stronger influence than socioeconomic background on occupational attainment

Gender inequalities in education have largely been reversed. In contrast to the

Data, Measures and Analyses

on educational and socioeconomic outcomes. Furthermore, more complex models

Table 1 provides evidence of a substantial decline in the influence of socioeconomic

Father’s Occupational Status .75*** (53.9) .77*** (43.0) .71*** (31.3)

Socioeconomic Background 1.70*** (50.2) 1.76*** (38.3) 1.61*** (32.1)

in socioeconomic background increased the odds of a university qualification

the decline in the effect of socioeconomic background on a university qualifica-

Age -1.24*** (-6.8) .51** (2.9) 1.12*** (8.2) .45* (2.5)

Male by Year -1.28*** (-5.8) -.80*** (-4.1)

Male 1.40*** (4.1) .49 (1.6)

The total or overall effect of socioeconomic background on occupational attain-

(or 33) percent (Table 3) consistent with the general

conclusion that education has a much stronger impact

on occupational attainment than socioeconomic back-

Consistent with one variant of modernization theory,

Age -1.24*** (-6.8) -.33† (-1.9) .26† (1.8) -.46* (-2.5)

Intercept 46.61*** (95.5) 44.48*** (93.7) 44.63*** (67.8) 45.06*** (73.8)

years in post-school education. Gender differences in occupational attainment are

Table 5 (Column 1, Panel 2), the gender gap in earnings

(net of hours worked) is declining by about 11 percent

for a university degree (which includes post-graduate and

honors degrees as well as three-year bachelor degrees).

Age .19*** (5.5) .18*** (5.8) .16*** (4.3) .22*** (4.6)

neo-liberal economic policies on the reproduction of socioeconomic inequalities

socioeconomic background and gender) on educational and other socioeconomic

in the importance of socioeconomic background will continue. According to

modernization theory is the finding that the

effects of education on occupational attain-

increases in the effect of years of education at

employees increasingly screened applicants

tainment increased more strongly among men

ated with modernization theory was not support-

education on earnings. This finding suggests that

the Australian labor market is not increasing the

increasing for certain types of education and

of adults with a university degree.

production theory are not supported because

tional attainment and earnings. Its effects on educational attainment would be

Marshall, Catherine 2000. “Policy Mechanisms for Gender Equity in Australia.”

Watson, Nicole. Editor. 2008. HILDA User Manual – Release 6. Melbourne Institute of

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Father’s Occupational Status .75* (53.9) .77* (43.0) .71*** (31.3)

Socioeconomic Background 1.70* (50.2) 1.76* (38.3) 1.61*** (32.1)

Age -1.24* (-6.8) .51 (2.9) 1.12*** (8.2) .45* (2.5)

Male by Year -1.28* (-5.8) -.80* (-4.1)

Intercept 46.61* (95.5) 44.48* (93.7) 44.63* (67.8) 45.06* (73.8)

Age .19* (5.5) .18* (5.8) .16* (4.3) .22* (4.6)