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Intergenerational Top Income Mobility in Sweden – Capitalist Dynasties in the Land of Equal Opportunity?

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  • Björklund, Anders

    ()
    (Stockholm University)

  • Roine, Jesper

    ()
    (Stockholm School of Economics)

  • Waldenström, Daniel

    ()
    (Research Institute of Industrial Economics (IFN))

Abstract

This paper presents new evidence on intergenerational mobility in the top of the income and earnings distribution. Using a large dataset of matched father-son pairs in Sweden, we find that intergenerational transmission is very strong in the top, more so for income than for earnings. In the extreme top (top 0.1 percent) income transmission is remarkable with an IG elasticity above 0.9. We also study potential transmission mechanisms and find that sons’ IQ, non-cognitive skills and education are all unlikely channels in explaining this strong transmission. Within the top percentile, increases in fathers’ income are, if anything, negatively associated with these variables. Wealth, on the other hand, has a significantly positive association. Our results suggest that Sweden, known for having relatively high intergenerational mobility in general, is a society where transmission remains strong in the very top of the distribution and that wealth is the most likely channel.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 775.

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Length: 31 pages
Date of creation: 03 Nov 2008
Date of revision: 27 Sep 2010
Handle: RePEc:hhs:iuiwop:0775

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Keywords: Intergenerational income mobility; Top incomes; Earnings inequality; Income inequality; Welfare state; Non-linear regression; Quantile regression;

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The Upper Class and Wealth Inequality in Sweden
    by Tino in Super-Economy on 2013-04-30 19:04:00
  2. Sweden has lots of wealth inequality
    by Tyler Cowen in Marginal Revolution on 2014-05-30 06:32:32
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Jäntti, Markus & Jenkins, Stephen P., 2013. "Income Mobility," IZA Discussion Papers 7730, Institute for the Study of Labor (IZA).
  2. Aaberge, Rolf & Atkinson, Anthony B. & Modalsli, Jorgen Heibo, 2013. "The Ins and Outs of Top Income Mobility," IZA Discussion Papers 7729, Institute for the Study of Labor (IZA).
  3. repec:ese:iserwp:2013-23 is not listed on IDEAS
  4. Jenderny, Katharina, 2013. "Mobility of top incomes in Germany," Discussion Papers 2013/7, Free University Berlin, School of Business & Economics.
  5. Björklund, Anders & Roine, Jesper & Waldenström, Daniel, 2012. "Intergenerational top income mobility in Sweden: Capitalist dynasties in the land of equal opportunity?," Journal of Public Economics, Elsevier, vol. 96(5), pages 474-484.
  6. William Nilsson, 2013. "Intergenerational Correlation Curves: Evidence from PSID," DEA Working Papers 58, Universitat de les Illes Balears, Departament d'Economía Aplicada.
  7. Josephson, Malin & Karnehed, Nina & Lindahl, Erica & Persson, Helena, 2013. "Intergenerational transmission of long-term sick leave," Working Paper Series 2013:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  8. Judith Niehues & Andreas Peichl, 2011. "Lower and Upper Bounds of Unfair Inequality: Theory and Evidence for Germany and the US," SOEPpapers on Multidisciplinary Panel Data Research 395, DIW Berlin, The German Socio-Economic Panel (SOEP).
  9. Judith Niehues & Andreas Peichl, 2012. "Bounds of Unfair Inequality of Opportunity: Theory and Evidence for Germany and the US," CESifo Working Paper Series 3815, CESifo Group Munich.
  10. Judith Niehues & Andreas Peichl, 2014. "Upper bounds of inequality of opportunity: theory and evidence for Germany and the US," Social Choice and Welfare, Springer, vol. 43(1), pages 73-99, June.
  11. Corak, Miles, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," IZA Discussion Papers 7520, Institute for the Study of Labor (IZA).
  12. Abigail Mcknight & Brian Nolan, 2012. "GINI Intermediate Report WP 4: Social Impacts of Inequalities," GINI Discussion Papers wp4, AIAS, Amsterdam Institute for Advanced Labour Studies.
  13. Cardak, Buly A. & Johnston, David W. & Martin, Vance L., 2013. "Intergenerational earnings mobility: A new decomposition of investment and endowment effects," Labour Economics, Elsevier, vol. 24(C), pages 39-47.
  14. Niehues, J. (Judith) & Andreas Peichl, 2012. "GINI DP 34: Bounds of Unfair Inequality of Opportunity: Theory and Evidence for Germany and the US," GINI Discussion Papers 34, AIAS, Amsterdam Institute for Advanced Labour Studies.
  15. Johan Fritzell & Jennie Bacchus-hertzman & O. Bäckman & I. Borg & T. Ferrarini & K. Nelson, 2010. "GINI Country Report: Growing Inequalities and their Impacts in Sweden," GINI Country Reports sweden, AIAS, Amsterdam Institute for Advanced Labour Studies.
  16. Stéphanie Jamet & Thomas Chalaux & Vincent Koen, 2013. "Labour Market and Social Policies to Foster More Inclusive Growth in Sweden," OECD Economics Department Working Papers 1023, OECD Publishing.

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