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Family Background and Income during the Rise of the Welfare State: Brother Correlations in Income for Swedish Men Born 1932-1968

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Author Info
Anders Björklund () (SOFI, Stockholm University and IZA)
Markus Jäntti () (Abo Akademi University)
Matthew J. Lindquist () (Stockholm University)

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Abstract

The goal of this study is to examine trends in the importance of family background in determining adult income in Sweden. We investigate whether the association between family background and income in Sweden has changed for cohorts born 1932-1968. Our main finding is that the share of the variance in long-run income that is attributable to family background, the so-called brother correlation in income, has fallen by some 11 percentage points from 0.34 for the cohorts of brothers born in the early 1930s to below 0.23 for the cohorts born around 1950. From then on, the correlations have been more or less stable and are in line with earlier estimates. When we adjust income for the income return to years of schooling, we find constant brother correlations in income. The main effect is coming from changes in the distribution of schooling across cohorts. This finding is consistent with the hypothesis that education policies have been a key factor in equalizing life chances in Sweden.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3000.

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Length: 45 pages
Date of creation: Aug 2007
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Handle: RePEc:iza:izadps:dp3000

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Related research
Keywords: sibling correlation; intergenerational mobility; family background;

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Find related papers by JEL classification:
D1 - Microeconomics - - Household Behavior
D3 - Microeconomics - - Distribution
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Grawe, Nathan D., 2003. "Life Cycle Bias in the Estimation of Intergenerational Earnings Persistence," Analytical Studies Branch Research Paper Series 2003207e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  2. Per-Anders Edin & Bertil Holmlund, 1995. "The Swedish Wage Structure: The Rise and Fall of Solidarity Wage Policy?," NBER Chapters, in: Differences and Changes in Wage Structures, pages 307-344 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  3. 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. [Downloadable!]
  4. Bhashkar Mazumder, 2004. "Sibling similarities, differences and economic inequality," Working Paper Series WP-04-13, Federal Reserve Bank of Chicago. [Downloadable!]
  5. Björklund, Anders & Eriksson, Tor & Jäntti, Markus & Raaum, Oddbjörn & Österbacka, Eva, 2000. "Brother Correlations in Earnings in Denmark, Finland, Norway and Sweden Compared to the United States," IZA Discussion Papers 158, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, vol. 96(4), pages 1308-1320, September. [Downloadable!]
    Other versions:
  7. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800 Elsevier. [Downloadable!] (restricted)
  8. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1.
  9. Kearl, J R & Pope, Clayne L, 1986. "Unobservable Family and Individual Contributions to the Distributionsof Income and Wealth," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S48-79, July. [Downloadable!] (restricted)
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