Understanding the factors that led to the Brexit vote

Inequality has increased considerably in the UK during the last several decades (World Inequality Database, 2018). This increase matters because societies with high inequality also have low levels of social mobility (Jerrim and Macmillan, 2013). Thus, it is not a surprise that social mobility in the UK is found to have fallen over time (Gregg et al., 2017). In the literature, social mobility is usually approximated by the intergenerational elasticity of income (IGE) (Blanden et al, 2002). This measure can be interpreted as the increase in children's income following from an additional 1£ of parental income. Higher values of IGE indicate a greater importance of parental income for determining children's income and so lower social mobility. However, most research on IGE in the UK has focused on estimating national rates of IGE rather than regional rates due to the lack of appropriate datasets. The only paper exploring regional IGE in the UK focuses on Government Regions rather than smaller administrative units such as Local Authorities and finds significant differences across regions (Friedman and Macmillan, 2017). In my doctoral research I would like to estimate IGE on a lower administrative unit such as LA.
I will overcome the data constraints by employing a multilevel model with random effects which is specifically efficient when applied to small sample sizes (Gelman and Hill, 2007). My estimates of IGE not only contribute to the literature on intergenerational mobility but also have two further benefits. Firstly, they provide an alternative to the Social Mobility Index employed by Whitehall to select social mobility coldspots which are LA with few economic opportunities and in which the government invest significantly to turn them into Opportunity Areas. However, Andrews et al (2017) has shown that the Index does not capture accurately the most disadvantaged LA. My estimates will provide an alternative measure which evaluates more precisely the economic opportunities in LAs.
Secondly, these estimates can contribute to our understanding of the factors that led to the Brexit vote. Becker et al (2017) have suggested that inadequate economic prospects in local labour markets have led to many people feeling 'left-behind' and so voting for Brexit. However, most research so far has focused on different proxies for local economic conditions such as education opportunities (Fetzer, 2017). In my doctoral dissertation, I will present a broader measure of local opportunities, allowing a deeper understanding of the factors that led to Brexit.