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Measuring the intergenerational correlation of worklessness

  • Lindsey Macmillan


This research uses the vast developments in the measurement of the intergenerational earnings mobility correlation over the past twenty years to explore the issues surrounding the measurement of the intergenerational correlation of worklessness. The correlation is estimated for a range of data sources. The role of conventional biases, measurement error and life-cycle bias, are considered in this context. An additional bias driven by local labour market conditions is introduced. For the UK, this correlation is moderate with large economic implications. Measurement error takes a different form to that commonly observed in the mobility literature but does not appear to play a substantial role in this story. In contrast to the mobility literature, life-cycle bias may not be playing a role either. Instead, there appears to be an additional bias driven by local labour market conditions at the time of measurement that should be considered when measuring intergenerational worklessness.

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Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 11/278.

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Length: 28 pages
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:bri:cmpowp:11/278
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  1. 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.
  2. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2010. "Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality," The Centre for Market and Public Organisation 10/230, Department of Economics, University of Bristol, UK.
  3. Grawe, Nathan D., 2006. "Lifecycle bias in estimates of intergenerational earnings persistence," Labour Economics, Elsevier, vol. 13(5), pages 551-570, October.
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