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Sources of Measurement Errors in Earnings Data: New Estimates of Intergenerational Elasticities

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Author Info

  • Nilsen, Øivind Anti

    ()
    (Department of Economics, Norwegian School of Economics and Business Administration)

  • Vaage, Kjell

    ()
    (Department of Economics, University of Bergen,)

  • Aakvik, Arild

    ()
    (Department of Economics, University of Bergen)

  • Jacobsen, Karl

    ()
    (Statistics Norway, Research Department)

Abstract

Using intergenerational data with a substantial part of the life-cycle earnings of children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility in Norway. Extending the length of the fathers’ earnings windows from 5 to 30 years increases the estimated elasticities. Varying the age of father at observation has the opposite effect. Our findings indicate that intergenerational earnings mobility may have been strongly overstated in many earlier studies with shorter earnings histories. Biases in the estimated elasticities appear to be related to age and/or life-cycle measurement errors more than persistency in the transitory innovations.

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File URL: http://www.uib.no/filearchive/No.%204-08.pdf
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Bibliographic Info

Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 04/08.

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Length: 22 pages
Date of creation: 23 Apr 2008
Date of revision:
Handle: RePEc:hhs:bergec:2008_004

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Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Phone: (+47)55589200
Fax: (+47)55589210
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Web page: http://www.uib.no/econ/en
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Related research

Keywords: Intergenerational mobility; measurement error.;

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  1. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
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