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Estimates of Intergenerational Elasticities Based on Lifetime Earnings

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  • Nilsen, Øivind Anti

    (Norwegian School of Economics)

  • Vaage, Kjell

    (University of Bergen)

  • Aakvik, Arild

    (University of Bergen)

  • Jacobsen, Karl

    (Statistics Norway)

Abstract

Using Norwegian 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. Extending the length of the fathers' earnings windows from 5 to 30 years increases the estimated elasticities. Increasing 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.

Suggested Citation

  • Nilsen, Øivind Anti & Vaage, Kjell & Aakvik, Arild & Jacobsen, Karl, 2008. "Estimates of Intergenerational Elasticities Based on Lifetime Earnings," IZA Discussion Papers 3709, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3709
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    References listed on IDEAS

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    11. 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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    Cited by:

    1. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 16, pages 1487-1541, Elsevier.
    2. Blanden, Jo, 2009. "How much can we learn from international comparisons of intergenerational mobility?," LSE Research Online Documents on Economics 28283, London School of Economics and Political Science, LSE Library.
    3. Nordin , Martin & Rooth, Dan-Olof, 2011. "Ability Heterogeneity in Intergenerational Mobility," Working Papers 2011:18, Lund University, Department of Economics.
    4. Chelsea Murray & Robert Graham Clark & Silvia Mendolia & Peter Siminski, 2018. "Direct Measures of Intergenerational Income Mobility for Australia," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 445-468, December.
    5. Stuhler, Jan, 2010. "Empirical Strategies to Eliminate Life-Cycle Bias in the Intergenerational Elasticity of Earnings Literature," IZA Discussion Papers 5245, Institute of Labor Economics (IZA).
    6. Blanden, Jo, 2013. "Cross-national rankings of intergenerational mobility: a comparison of approaches from economics and sociology," LSE Research Online Documents on Economics 59310, London School of Economics and Political Science, LSE Library.
    7. Sajid Amin Javed & Mohammad Irfan, 2014. "Intergenerational Mobility: Evidence from Pakistan Panel Household Survey," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 53(2), pages 175-203.
    8. Qin, Xuezheng & Wang, Tianyu & Zhuang, Castiel Chen, 2016. "Intergenerational transfer of human capital and its impact on income mobility: Evidence from China," China Economic Review, Elsevier, vol. 38(C), pages 306-321.
    9. Coban, Mustafa & Sauerhammer, Sarah, 2017. "Transmission channels of intergenerational income mobility: Empirical evidence from Germany and the Unites States," Discussion Paper Series 138, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    10. Quheng Deng & Björn Gustafsson & Shi Li, 2013. "Intergenerational Income Persistence in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(3), pages 416-436, September.
    11. Rozinskaya, N. & Drobyshevskaya, T., 2022. "Quantitative estimates of intergenerational mobility," Journal of the New Economic Association, New Economic Association, vol. 57(5), pages 93-111.

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    More about this item

    Keywords

    intergenerational mobility; measurement error;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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