Intergenerational persistence in latent socioeconomic status: evidence from Taiwan

Inspired by the work of Clark and others, recent studies by Vosters and coauthors attempt to examine whether purely economic indicators of status, such as a multi-year average of earnings, suffice to capture a broader concept of socioeconomic status. They use Lubotsky and Wittenberg’s (2006) method to combine multiple proxies, but find that for the United States and Sweden incorporating additional partial measures such as education and occupation has no meaningful impact on the persistence estimates obtained from conventional approaches that focused on earnings measures. In this study, I explore whether considering intergenerational persistence in this more comprehensive sense reveals higher estimated persistence rates for Taiwan. Contrary to previous findings, my results show that the aggregation of earnings, education, and occupation reduces the downward inconsistency in traditional estimates of persistence, suggesting that mobility in Taiwan is lower than previously estimated and in the same range as for the United States.