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American Exceptionalism in a New Light: A Comparison of Intergenerational Earnings Mobility in the Nordic Countries, the United Kingdom and the United States

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Author Info

  • Jäntti, Markus

    ()
    (SOFI, Stockholm University)

  • Bratsberg, Bernt

    ()
    (Ragnar Frisch Centre for Economic Research)

  • Røed, Knut

    ()
    (Ragnar Frisch Centre for Economic Research)

  • Raaum, Oddbjørn

    ()
    (Ragnar Frisch Centre for Economic Research)

  • Naylor, Robin

    ()
    (University of Warwick)

  • Österbacka, Eva

    ()
    (Abo Akademi University)

  • Björklund, Anders

    ()
    (SOFI, Stockholm University)

  • Eriksson, Tor

    ()
    (Aarhus School of Business)

Abstract

We develop methods and employ similar sample restrictions to analyse differences in intergenerational earnings mobility across the United States, the United Kingdom, Denmark, Finland, Norway and Sweden. We examine earnings mobility among pairs of fathers and sons as well as fathers and daughters using both mobility matrices and regression and correlation coefficients. Our results suggest that all countries exhibit substantial earnings persistence across generations, but with statistically significant differences across countries. Mobility is lower in the U.S. than in the U.K., where it is lower again compared to the Nordic countries. Persistence is greatest in the tails of the distributions and tends to be particularly high in the upper tails: though in the U.S. this is reversed with a particularly high likelihood that sons of the poorest fathers will remain in the lowest earnings quintile. This is a challenge to the popular notion of 'American exceptionalism'. The U.S. also differs from the Nordic countries in its very low likelihood that sons of the highest earners will show downward 'long-distance' mobility into the lowest earnings quintile. In this, the U.K. is more similar to the U.S..

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1938.

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Length: 43 pages
Date of creation: Jan 2006
Date of revision:
Handle: RePEc:iza:izadps:dp1938

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Keywords: long-run earnings; intergenerational mobility; earnings inequality;

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References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Social mobility: the nasty arithmetic
    by chris dillow in Stumbling and Mumbling on 2008-06-24 08:58:30
  2. Bosses' pay as signal
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  3. Social mobility: limits of education
    by chris dillow in Stumbling and Mumbling on 2007-06-25 08:43:35
  4. Suecia, primer mundo
    by Natalio Ruiz in Cosas que pasan on 2008-05-27 01:18:00
  5. Fewer than 1 percent of Americans are millionaires, but almost one in three believe theyâ??ll end up among that group at some point
    by zooeygoethe in Economic Objectorvism on 2007-12-14 00:18:17
  6. Sweden: Image and Reality
    by Lane Kenworthy in Consider the Evidence on 2008-05-26 20:08:40
  7. Paradigmskifte i välståndsfabriken
    by Roger Mo?rtvik in Utredarna on 2008-12-19 12:58:34
  8. Myten om låglönesamhällets fördelar
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Orsetta Causa & Catherine Chapuis, 2009. "Equity in Student Achievement Across OECD Countries: An Investigation of the Role of Policies," OECD Economics Department Working Papers 708, OECD Publishing.
  2. Anirudh Krishna, 2011. "Characteristics and Patterns of Intergenerational Poverty Traps and Escapes in Rural North India," Working Papers id:3940, eSocialSciences.
  3. Richard Breen, 2010. "Social Mobility and Equality of Opportunity Geary Lecture Spring 2010," The Economic and Social Review, Economic and Social Studies, vol. 41(4), pages 413-428.
  4. Raaum, Oddbjørn & Bratsberg, Bernt & Røed, Knut & Österbacka, Eva & Eriksson, Tor & Jäntti, Markus & Naylor, Robin, 2007. "Marital Sorting, Household Labor Supply, and Intergenerational Earnings Mobility across Countries," IZA Discussion Papers 3037, Institute for the Study of Labor (IZA).
  5. Bratberg, Espen & Rieck, Karsten Marshall Elseth & Vaage, Kjell, 2011. "Intergenerational Earnings Mobility and Divorce," Working Papers in Economics 09/11, University of Bergen, Department of Economics.
  6. 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.
  7. Richard M. Bird & Eric M. Zolt, 2013. "Taxation and Inequality in the Americas: Changing the Fiscal Contract?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1322, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  8. Thomas Siedler & Bettina Sonnenberg, 2012. "Intergenerational Earnings Mobility and Preferences for Redistribution," SOEPpapers on Multidisciplinary Panel Data Research 510, DIW Berlin, The German Socio-Economic Panel (SOEP).
  9. Sara Ayllón, 2009. "Modelling state dependence and feedback effects between poverty, employment and parental home emancipation among European youth," Working Papers 10, Government Institute for Economic Research Finland (VATT).
  10. Corak, Miles & Curtis, Lori & Phipps, Shelley, 2010. "Economic Mobility, Family Background, and the Well-Being of Children in the United States and Canada," IZA Discussion Papers 4814, Institute for the Study of Labor (IZA).
  11. Björklund, Anders & Roine, Jesper & Waldenström, Daniel, 2008. "Intergenerational top income mobility in Sweden – A combination of equal opportunity and capitalistic dynasties," Working Paper Series in Economics and Finance 705, Stockholm School of Economics.
  12. Napel, Stefan & Schneider, Andrea, 2008. "Intergenerational talent transmission, inequality, and social mobility," Economics Letters, Elsevier, vol. 99(2), pages 405-409, May.
  13. 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.
  14. Maarten Van Ham & Allan Findlay & David Manley & Peteke Feijten, 2011. "Social mobility: Is there a benefit of being English in Scotland?," ERSA conference papers ersa10p463, European Regional Science Association.
  15. Jonsson, Jan O. & Mood, Carina & Bihagen, Erik, 2011. "Poverty in Sweden 1991-2007. Change, dynamics, and intergenerational transmission of poverty during economic recession and growth," Working Paper Series 10/2011, Swedish Institute for Social Research.

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