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Intergenerational mobility and sample selection in short panels

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  • Cheti Nicoletti

    (Institute for Social and Economic Research, University of Essex, Colchester, UK)

  • Marco Francesconi

    (Department of Economics, University Essex, Colchester, UK)

Abstract

Using data from the first 11 waves of the BHPS, this paper measures the extent of the selection bias induced by standard coresidence conditions-bias that is expected to be severe in short panels-on measures of intergenerational mobility in occupational prestige. We try to limit the impact of other selection biases, such as those induced by labour market restrictions that are typically imposed in intergenerational mobility studies, by using different measures of socio-economic status that account for missing labour market information. We stress four main results. First, there is evidence of an underestimation of the true intergenerational elasticity, the extent of which ranges between 12% and 39%. Second, the proposed methods used to correct for the selection bias seem to be unable to attenuate it, except for the propensity score weighting procedure, which performs well in most circumstances. This result is confirmed both under the assumption of missing-at-random data as well as under the assumption of not-missing-at-random data. Third, the two previous sets of results (direction and extent of the bias, and differential abilities to correct for it) are also robust when we account for measurement error. Fourth, restricting the sample to a period shorter than the 11 waves under analysis leads to a severe sample selection bias. In the cases when the analysis is limited to eight waves, this bias ranges from about 40% to 65%. Copyright © 2006 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 21 (2006)
Issue (Month): 8 ()
Pages: 1265-1293

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Handle: RePEc:jae:japmet:v:21:y:2006:i:8:p:1265-1293

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References

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Citations

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Cited by:
  1. Brown, Sarah & Ortiz-Nuñez, Aurora & Taylor, Karl, 2011. "What will I be when I grow up? An analysis of childhood expectations and career outcomes," Economics of Education Review, Elsevier, vol. 30(3), pages 493-506, June.
  2. Ken Yamada, 2012. "Family Background and Economic Outcomes in Japan," Working Papers 23-2012, Singapore Management University, School of Economics.
  3. Maribel Jiménez, 2011. "Un Análisis Empírico de las No Linealidades en la Movilidad Intergeneracional del Ingreso. El caso de la Argentina," CEDLAS, Working Papers 0114, CEDLAS, Universidad Nacional de La Plata.
  4. Sayema H. Bidisha, . "Intergenerational Earnings Mobility of Immigrants and Ethnic Minorities in the UK," Discussion Papers 09/10, University of Nottingham, GEP.
  5. Nicoletti Cheti & Ermisch John F, 2008. "Intergenerational Earnings Mobility: Changes across Cohorts in Britain," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(2), pages 1-38, January.
  6. Bratti, Massimiliano & Checchi, Daniele & de Blasio, Guido, 2008. "Does the Expansion of Higher Education Increase the Equality of Educational Opportunities? Evidence from Italy," IZA Discussion Papers 3361, Institute for the Study of Labor (IZA).
  7. Cervini-Plá, María, 2012. "Exploring the sources of earnings transmission in Spain," MPRA Paper 36093, University Library of Munich, Germany.
  8. Ermisch, John & Francesconi, Marco & Siedler, Thomas, 2005. "Intergenerational Economic Mobility and Assortative Mating," IZA Discussion Papers 1847, Institute for the Study of Labor (IZA).
  9. Cervini-Plá, María, 2011. "Intergenerational earnings and income mobility in Spain," MPRA Paper 34942, University Library of Munich, Germany.
  10. Quheng Deng & Björn Gustafsson & Shi Li, 2013. "Intergenerational Income Persistence in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(3), pages 416-436, 09.
  11. Nicoletti, Cheti, 2008. "Multiple sample selection in the estimation of intergenerational occupational mobility," ISER Working Paper Series 2008-20, Institute for Social and Economic Research.
  12. Maribel Jimenez & Monica Jimenez, 2009. "La Movilidad Intergeneracional del Ingreso: Evidencia para Argentina," CEDLAS, Working Papers 0084, CEDLAS, Universidad Nacional de La Plata.
  13. Platt, Lucinda, 2005. "Mobility and missing data: what difference does non-response make to observed patterns of intergenerational class mobility by ethnic group?," ISER Working Paper Series 2005-10, Institute for Social and Economic Research.

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