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Intergenerational Earnings Persistence and Economic Inequality in the Long Run: Evidence from French Cohorts, 1931–75

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  • Arnaud Lefranc

Abstract

This paper analyses long‐term trends in intergenerational earnings persistence in France for male cohorts born between 1931 and 1975. This time period has witnessed important changes in the French labour market and educational system, in particular an important compression of earnings differentials as well as a large expansion in access to secondary and higher education. Using a two‐sample instrumental variables approach, I estimate two measures of intergenerational economic persistence: the intergenerational earnings elasticity (IGE) and the intergenerational correlation (IGC). Over the period, the IGE exhibits a V‐shaped pattern. It falls from a high of value of 0.6 for cohorts born in the 1930s to around 0.4 for those born in the 1950s, but subsequently rises to a level close to that at the beginning of the period. In contrast, the IGC remains relatively stable over the period. This suggests that changes in the IGE are partly driven by transitory responses to changes in cross‐sectional inequality rather than long‐term changes in the degree of intergenerational persistence.

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  • Arnaud Lefranc, 2018. "Intergenerational Earnings Persistence and Economic Inequality in the Long Run: Evidence from French Cohorts, 1931–75," Economica, London School of Economics and Political Science, vol. 85(340), pages 808-845, October.
    • Handle: RePEc:bla:econom:v:85:y:2018:i:340:p:808-845
    DOI: 10.1111/ecca.12269
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    5. Hippolyte d’Albis & Ikpidi Badji, 2019. "Intergenerational inequalities in mortality-adjusted disposable incomes," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 17(1), pages 037-069.
    6. Gustave Kenedi & Louis Sirugue, 2021. "The Anatomy of Intergenerational Income Mobility in France and its Spatial Variations," PSE Working Papers halshs-03455282, HAL.
    7. Liu, Qijun & Song, Lijie, 2022. "Do intergovernmental transfers boost intergenerational income mobility? Evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 293-309.
    8. Stéphane Benveniste, 2024. "Political and Business Dynasties: a Social Gradient in Returns to Elite Education," AMSE Working Papers 2410, Aix-Marseille School of Economics, France.
    9. Gustave Kenedi & Louis Sirugue, 2021. "The Anatomy of Intergenerational Income Mobility in France and its Spatial Variations," SciencePo Working papers hal-03812824, HAL.
    10. Gustave Kenedi & Louis Sirugue, 2021. "The Anatomy of Intergenerational Income Mobility in France and its Spatial Variations," Working Papers halshs-03455282, HAL.
    11. Joel HELLIER, 2023. "Increasing skill premium and education decisions: Higher intra-skilled inequality and lower inter-skill mobility," Working Papers 643, ECINEQ, Society for the Study of Economic Inequality.
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