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Family, Community and Long-Term Earnings Inequality

Author

Listed:
  • Paul Bingley
  • Lorenzo Cappellari

    (Università Cattolica del Sacro Cuore
    Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)

  • Konstantinos Tatsiramos

Abstract

Correlations between the earnings of siblings reflect shared family and community background, but evidence is mixed on the relative magnitudes of these influences. We estimate long run earnings correlations between brothers, school mates and teenage neighbors jointly in a unified framework. Using administrative data on the Danish population we find that (1) family is by far the most relevant factor that shapes long-term earnings; (2) the contribution of neighborhood and school quality on long-term earnings is overestimated if the family component is ignored, and becomes negligible and not significantly different from zero by age 30; and (3) the importance of family declines over the life-cycle.

Suggested Citation

  • Paul Bingley & Lorenzo Cappellari & Konstantinos Tatsiramos, 2014. "Family, Community and Long-Term Earnings Inequality," DISCE - Working Papers del Dipartimento di Economia e Finanza def017, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    • Handle: RePEc:ctc:serie1:def017
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    More about this item

    Keywords

    Sibling correlations; Neighborhoods; Schools; Life-cycle earnings; Inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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