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Assessing Intergenerational Earnings Persistence among German Workers

  • Philipp Eisenhauer
  • Friedhelm Pfeiffer

In this study we assess the relationship between father and son earnings among (West) German Workers. To reduce the lifecycle and attenuation bias a novel sampling procedure is developed and applied to the German Socio-Economic Panel (SOEP) 1984-2006. Our preferred point estimate indicates an intergenerational earnings elasticity of 1/3 .

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.89978.de/diw_sp0134.pdf
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 134.

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Length: 27 + Anh. p.
Date of creation: 2008
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp134
Contact details of provider: Postal: Mohrenstraße 58, D-10117 Berlin
Phone: xx49-30-89789-671
Fax: xx49-30-89789-109
Web page: http://www.diw.de/en/soep
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  1. Grawe, Nathan D., 2006. "Lifecycle bias in estimates of intergenerational earnings persistence," Labour Economics, Elsevier, vol. 13(5), pages 551-570, October.
  2. Johannes Gernandt & Friedhelm Pfeiffer, 2007. "Rising Wage Inequality in Germany," SOEPpapers on Multidisciplinary Panel Data Research 14, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. 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.
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  15. Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
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  19. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," NBER Working Papers 11943, National Bureau of Economic Research, Inc.
  20. Goldberger, Arthur S., 1981. "Linear regression after selection," Journal of Econometrics, Elsevier, vol. 15(3), pages 357-366, April.
  21. Kenneth A. Couch & Thomas A. Dunn, 1995. "Intergenerational Correlations in Labor Market Status: A Comparison of the United States and Germany," Discussion Papers of DIW Berlin 111, DIW Berlin, German Institute for Economic Research.
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  23. Miles Corak & Andrew Heisz, 1999. "The Intergenerational Earnings and Income Mobility of Canadian Men: Evidence from Longitudinal Income Tax Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 504-533.
  24. Samuel Bowles & Herbert Gintis, 2002. "The Inheritance of Inequality," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 3-30, Summer.
  25. Solon, Gary, 1989. "Biases in the Estimation of Intergenerational Earnings Correlations," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 172-74, February.
  26. Baker, Michael, 1997. "Growth-Rate Heterogeneity and the Covariance Structure of Life-Cycle Earnings," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 338-75, April.
  27. Pfeiffer, Friedhelm & Reuß, Karsten, 2007. "Age-dependent Skill Formation and Returns to Education," ZEW Discussion Papers 07-015, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  28. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
  29. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
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  33. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800 Elsevier.
  34. Thorsten Vogel, 2006. "Reassessing Intergenerational Mobility in Germany and the United States: The Impact of Differences in Lifecycle Earnings Patterns," SFB 649 Discussion Papers SFB649DP2006-055, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  35. Piketty, Thomas, 2000. "Theories of persistent inequality and intergenerational mobility," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 8, pages 429-476 Elsevier.
  36. Francine D. Blau & Lawrence M. Kahn, 1994. "International Differences in Male Wage Inequality: Institutions versus Market Forces," NBER Working Papers 4678, National Bureau of Economic Research, Inc.
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