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Intergenerational economic mobility in the U.S., 1940 to 2000

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  • Daniel Aaronson
  • Bhashkar Mazumder

Abstract

We use two sample instrumental variables to estimate intergenerational economic mobility from 1940 to 2000. We find intergenerational mobility increased from 1940 to 1980 but declined sharply thereafter, a pattern similar to cross-sectional inequality trends. However, the returns to education account for only some of these patterns. The time- series may help to reconcile previous findings in the intergenerational mobility literature. Our estimates imply a somewhat different pattern for the intergenerational income correlation, a measure insensitive to changes in cross-sectional inequality that has implications for rank mobility. We find the post-1980 decline in intergenerational rank mobility marks a return to historical levels. Consequently, by 2000, the rate of intergenerational movement across the income distribution appears historically normal, but, as cross-sectional inequality has increased, earnings are regressing to the mean at a slower rate, causing economic differences between families to persist longer than earlier in the century.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-05-12.

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Date of creation: 2005
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Handle: RePEc:fip:fedhwp:wp-05-12

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Keywords: Income ; Labor mobility;

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References

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Blog mentions

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  1. Larry Womack: Where 30 Years of Real Class Warfare Has Left America
    by Larry Womack in huffington post business on 2011-08-24 21:09:29
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Cited by:
  1. Mazumder, Bhashkar, 2014. "Black–White Differences in Intergenerational Economic Mobility in the U.S," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 1-18.
  2. Niknami, Susan, 2010. "Intergenerational Transmission of Education among Immigrant Mothers and their Daughters in Sweden," SULCIS Working Papers 2010:10, Stockholm University Linnaeus Center for Integration Studies - SULCIS.
  3. Pekkarinen, Tuomas & Uusitalo, Roope & Pekkala, Sari, 2006. "Education Policy and Intergenerational Income Mobility: Evidence from the Finnish Comprehensive School Reform," IZA Discussion Papers 2204, Institute for the Study of Labor (IZA).
  4. Brian Nolan & Gosta Esping-Andersen & Christopher T. Whelan & Bertrand Maitre, 2010. "The Role of Social Institutions in Inter-Generational Mobility," Working Papers 201018, Geary Institute, University College Dublin.
  5. Pekkarinen, Tuomas & Uusitalo, Roope & Kerr, Sari, 2009. "School tracking and intergenerational income mobility: Evidence from the Finnish comprehensive school reform," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 965-973, August.
  6. Andrea Ichino & Loukas Karabarbounis & Enrico Moretti, 2011. "The Political Economy Of Intergenerational Income Mobility," Economic Inquiry, Western Economic Association International, vol. 49(1), pages 47-69, 01.
  7. Hirvonen, Lalaina, 2006. "Intergenerational Earnings Mobility Among Daughters and Sons: Evidence from Sweden and a Comparison with the United States," Working Paper Series 5/2006, Swedish Institute for Social Research.
  8. Jo Blanden, 2009. "How Much Can We Learn from International Comparisons of Intergenerational Mobility?," CEE Discussion Papers 0111, Centre for the Economics of Education, LSE.

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