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Consumption and Income Inequality across Generations

Author

Listed:
  • Giovanni Gallipoli
  • Hamish Low
  • Aruni Mitra

Abstract

This paper characterizes the joint evolution of income and consumption inequality across generations. We estimate a model featuring intergenerational persistence and family-independent idiosyncratic heterogeneity. We find that inequality in income and consumption is predominantly driven by idiosyncratic factors rather than intergenerational linkages. We show evidence of consumption insurance against idiosyncratic lifetime income risk, particularly for the bottom and top quartiles of income. Parental income is a significant source of this insurance only for the richest quartile.

Suggested Citation

  • Giovanni Gallipoli & Hamish Low & Aruni Mitra, 2026. "Consumption and Income Inequality across Generations," Journal of Labor Economics, University of Chicago Press, vol. 44(3), pages 967-1008.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/733051
    DOI: 10.1086/733051
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Consumption and Income Inequality across Generations
      by Christian Zimmermann in NEP-DGE blog on 2020-09-07 03:19:30

    Citations

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    Cited by:

    1. is not listed on IDEAS
    2. Lochner, Lance & Park, Youngmin, 2024. "Earnings dynamics and intergenerational transmission of skill," Journal of Econometrics, Elsevier, vol. 243(1).
    3. Uta Bolt & Eric French & Jamie Hentall Maccuish & Cormac O’Dea, 2018. "Intergenerational Altruism and Transfers of Time and Money: A Life-cycle Perspective," Working Papers wp379, University of Michigan, Michigan Retirement Research Center.
    4. Koeniger, Winfried & Zanella, Carlo, 2022. "Opportunity and inequality across generations," Journal of Public Economics, Elsevier, vol. 208(C).
    5. Gallipoli, Giovanni, 2023. "Comments on unequal growth," Journal of Monetary Economics, Elsevier, vol. 133(C), pages 19-24.

    More about this item

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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