Interpreting Trends in Intergenerational Income Mobility
AbstractWe examine how intergenerational income mobility responds to structural changes in a simple theoretical model of intergenerational transmission, deviating from the existing literature by explicitly analyzing the transition path between steady states. We find that mobility depends not only on current but also on past transmission mechanisms, such that changing policies, institutions or economic conditions may generate long-lasting trends. Variation in mobility levels across countries may thus be partly explained by differences in former institutions; current mobility trends may be caused by institutional changes in the past. We further find that transitions between steady states tend to be non-monotonic. Changes in the relative returns to different skills or a shift towards a less plutocratic and more meritocratic economy raise mobility initially, but also generate a negative trend over subsequent generations. Times of change thus tend to be times of high mobility, and declining mobility today may not reflect a recent deterioration of equality of opportunity but rather major improvements made in the past.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7514.
Length: 42 pages
Date of creation: Jul 2013
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
This paper has been announced in the following NEP Reports:
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.:
- Galor, Oded & Tsiddon, Daniel, 1997.
"Technological Progress, Mobility, and Economic Growth,"
American Economic Review,
American Economic Association, vol. 87(3), pages 363-82, June.
- Galor, O. & Tsiddon, D., 1996. "Technological Progress, Mobility and Economic Growth," Papers 13-96, Tel Aviv.
- Galor, Oded & Tsiddon, Daniel, 1996. "Technological Progress, Mobility, and Economic Growth," CEPR Discussion Papers 1413, C.E.P.R. Discussion Papers.
- Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011.
"Top Incomes in the Long Run of History,"
Journal of Economic Literature,
American Economic Association, vol. 49(1), pages 3-71, March.
- Tarjei Havnes & Magne Mogstad, 2011. "No Child Left Behind: Subsidized Child Care and Children's Long-Run Outcomes," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 97-129, May.
- Nybom, Martin & Stuhler, Jan, 2011. "Heterogeneous Income Profiles and Life-Cycle Bias in Intergenerational Mobility Estimation," IZA Discussion Papers 5697, Institute for the Study of Labor (IZA).
- Jenkins, Stephen P, 1982. "Tools for the Analysis of distributional Models," The Manchester School of Economic & Social Studies, University of Manchester, vol. 50(2), pages 139-50, June.
- David H. Autor & Frank Levy & Richard J. Murnane, 2001.
"The Skill Content of Recent Technological Change: An Empirical Exploration,"
NBER Working Papers
8337, National Bureau of Economic Research, Inc.
- David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
- David Autor & Frank Levy & Richard Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
- Erik Lindqvist & Roine Vestman, 2011.
"The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment,"
American Economic Journal: Applied Economics,
American Economic Association, vol. 3(1), pages 101-28, January.
- Lindqvist, Erik & Westman, Roine, 2009. "The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment," Working Paper Series 794, Research Institute of Industrial Economics.
- A. B. Atkinson & S. P. Jenkins, 1984. "The Steady-State Assumption and the Estimation of Distributional and Related Models," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 358-376.
- Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2007.
"Family Background and Income during the Rise of the Welfare State: Brother Correlations in Income for Swedish Men Born 1932-1968,"
IZA Discussion Papers
3000, Institute for the Study of Labor (IZA).
- Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2009. "Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932-1968," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 671-680, June.
- Nicoletti Cheti & Ermisch John F, 2008.
"Intergenerational Earnings Mobility: Changes across Cohorts in Britain,"
The B.E. Journal of Economic Analysis & Policy,
De Gruyter, vol. 7(2), pages 1-38, January.
- Lars Lefgren & Matthew J. Lindquist & David Sims, 2012.
"Rich Dad, Smart Dad: Decomposing the Intergenerational Transmission of Income,"
Journal of Political Economy,
University of Chicago Press, vol. 120(2), pages 268 - 303.
- Lefgren, Lars & Lindquist, Matthew & Sims, David, 2009. "Rich Dad, Smart Dad: Decomposing the Intergenerational Transmission of Income," Research Papers in Economics 2009:19, Stockholm University, Department of Economics.
- Bhashkar Mazumder, 2005. "Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 235-255, May.
- Stuhler, Jan, 2012. "Mobility Across Multiple Generations: The Iterated Regression Fallacy," IZA Discussion Papers 7072, Institute for the Study of Labor (IZA).
- Arrow, Kenneth J., 1973. "Higher education as a filter," Journal of Public Economics, Elsevier, vol. 2(3), pages 193-216, July.
- Jeffrey S. Zax & Daniel I. Rees, 2002. "IQ, Academic Performance, Environment, and Earnings," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 600-616, November.
- Daniel Aaronson & Bhashkar Mazumder, 2008. "Intergenerational Economic Mobility in the United States, 1940 to 2000," Journal of Human Resources, University of Wisconsin Press, vol. 43(1).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.