Earning more than your parents has been a marker of success for more than 50 years but just a third of 30 year olds bring in a higher salary than their dads, experts say.
Researchers found that more than half of men and women aged 30 earned more than their fathers in 2005.
That figure began to drop from 2007 onwards, at the start of the last decade’s financial crash, with earnings falling in real terms ever since.
Experts from the University of Surrey used estimates of earnings from the Family Expenditure Survey and Labour Force Survey from 1968 onwards.
They also information from the British Cohort Study on the link between parents’ and children’s earnings for those born from 1970 onwards.
They used this to examine the concept of ‘absolute mobility’ – the proportion of people earning more than their parents.
They found that the fall in earnings since the start of the financial crash was the biggest influencing factor.
If weekly earnings had continued to grow at two percent each year since – following the pre-2008 trend – the proportion of young adults exceeding their fathers’ earnings would have stayed at around 50 percent, they say.
Comparing the standard of living today with that of the past is crucial for understanding the UK’s economic and social health, researchers say.
Jo Blanden, co-author of the study, said: ‘Research and political debate have focused on relative social mobility – that is, whether those with higher incomes are likely to have children who are also relatively well-off.
‘Our research highlights that this is no longer the case and clearly demonstrates that the economic gap between old and young is likely to become an increasingly charged political issue.’
The results correspond with findings from a recent Ipsos MORI poll showing that only 36 percent of ‘millennials’ – young people born between 1981 and 1996 – believe that they will be financially better off than their parents.
The figure among ‘baby boomers’ – people born in the period from 1945 to 1965 – is about 20 percent higher.
The authors also compared their results with those for Canada and the United States.
The outlook for the UK and the United States is similar, they found, with both showing significant falls in absolute mobility.
But there is not the same pattern in Canada where absolute mobility is higher and has remained stable.
Co-author Sumaiya Rahman added: ‘Canada’s experience indicates that the poor prospects for young people in the UK are not inevitable.’
The analysis also looked at data for men and women separately.
As women earn less than men, only a quarter of women aged 30 earned more than their fathers in 2017, compared with almost 45 percent of men of a similar age.
Faster growth in young women’s earnings in the 1990s and early 2000s meant that daughters improved their chances of earning more than their fathers, but the consequences of the financial crash have since reversed this trend.
The full findings of the study will be presented at the Royal Economic Society’s annual conference at the University of Warwick running from April 15 to 17.