IDEAS home Printed from https://ideas.repec.org/p/diw/diwsop/diw_sp365.html
   My bibliography  Save this paper

How Important Is the Family?: Evidence from Sibling Correlations in Permanent Earnings in the US, Germany and Denmark

Author

Listed:
  • Daniel D. Schnitzlein

Abstract

This paper is the first to analyze intergenerational economic mobility based on sibling correlations in permanent earnings in Germany and to provide a cross-country comparison of Germany, Denmark, and the US. The main findings are as follows: the importance of family and community background in Germany is higher than in Denmark and comparable to that in the US. This holds true for brothers and sisters. In Denmark 20 percent of the inequality in permanent earnings can be attributed to family and community factors shared by brothers while the corresponding estimates are 43 percent in Germany and 45 percent in the US. For sisters the estimates are 19 percent for Denmark, 39 percent for Germany and 29 percent for the US. This ranking is shown to be robust against alternative approaches.

Suggested Citation

  • Daniel D. Schnitzlein, 2011. "How Important Is the Family?: Evidence from Sibling Correlations in Permanent Earnings in the US, Germany and Denmark," SOEPpapers on Multidisciplinary Panel Data Research 365, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp365
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.369678.de/diw_sp0365.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kenneth A. Couch & Thomas A. Dunn, 1997. "Intergenerational Correlations in Labor Market Status: A Comparison of the United States and Germany," Journal of Human Resources, University of Wisconsin Press, vol. 32(1), pages 210-232.
    2. Yuksel, Mutlu, 2009. "Intergenerational Mobility of Immigrants in Germany: Moving with Natives or Stuck in their Neighborhoods?," IZA Discussion Papers 4677, Institute of Labor Economics (IZA).
    3. Joachim R. Frick & Stephen P. Jenkins & Dean R. Lillard & Oliver Lipps & Mark Wooden, 2007. "European Data Watch: The Cross-National Equivalent File (CNEF) and its Member Country Household Panel Studies," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(4), pages 627-654.
    4. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    5. Miles Corak, 2006. "Do Poor Children Become Poor Adults? Lessons from a Cross-Country Comparison of Generational Earnings Mobility," Research on Economic Inequality, in: Dynamics of Inequality and Poverty, pages 143-188, Emerald Group Publishing Limited.
    6. Tor Eriksson & Yingqiang Zhang, 2012. "The Role of Family Background for Earnings in Rural China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 7(3), pages 465-477, September.
    7. 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.
    8. Schnitzlein, Daniel D., 2014. "How Important Is the Family? Evidence from Sibling Correlations in Permanent Earnings in the USA, Germany, and Denmark," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 27(1), pages 69-89.
    9. Eisenhauer, Philipp & Pfeiffer, Friedhelm, 2008. "Assessing intergenerational earnings persistence among German workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 119-137.
    10. Eisenhauer, Philipp & Pfeiffer, Friedhelm, 2008. "Assessing intergenerational earnings persistence among German workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 119-137.
    11. Bhashkar Mazumder, 2008. "Sibling similarities and economic inequality in the US," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(3), pages 685-701, July.
    12. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 645-677.
    13. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 16, pages 1487-1541, Elsevier.
    14. Corak,Miles (ed.), 2004. "Generational Income Mobility in North America and Europe," Cambridge Books, Cambridge University Press, number 9780521827607, October.
    15. Markus Jäntti & Eva Österbacka & Oddbjörn Raaum & Tor Eriksson & Anders Björklund, 2002. "Brother correlations in earnings in Denmark, Finland, Norway and Sweden compared to the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(4), pages 757-772.
    16. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    17. Schnitzlein, Daniel D., 2012. "How Important Is Cultural Background for the Level of Intergenerational Mobility?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 114(3), pages 335-337.
    18. Simona Lorena Comi, 2010. "Family influence on early career outcomes in seven European countries," Economics Bulletin, AccessEcon, vol. 30(3), pages 2054-2062.
    19. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2009. "Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932-1968," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 671-680, June.
    20. Solon, Gary, 1989. "Biases in the Estimation of Intergenerational Earnings Correlations," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 172-174, February.
    21. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    22. 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.
    23. Mazumder Bhashkar, 2011. "Family and Community Influences on Health and Socioeconomic Status: Sibling Correlations Over the Life Course," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(3), pages 1-23, September.
    24. Eisenhauer, Philipp & Pfeiffer, Friedhelm, 2008. "Assessing intergenerational earnings persistence among German workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 119-137.
    25. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    26. Gary Solon & Mary Corcoran & GRoger Gordon & Deborah Laren, 1991. "A Longitudinal Analysis of Sibling Correlations in Economic Status," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 509-534.
    27. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
    28. Björklund Anders & Lindahl Lena & Lindquist Matthew J., 2010. "What More Than Parental Income, Education and Occupation? An Exploration of What Swedish Siblings Get from Their Parents," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-40, November.
    29. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-1189, December.
    30. Vogel, Thorsten, 2006. "Reassessing intergenerational mobility in Germany and the United States: The impact of differences in lifecycle earnings patterns," SFB 649 Discussion Papers 2006-055, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    31. Frick, Joachim R. & Jenkings, Stephen P. & Lillard, Dean R. & Lipps, Oliver & Wooden, Mark, 2007. "The Cross-National Equivalent File (CNEF) and Its Member Country Household Panel Studies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 127(4), pages 627-654.
    32. Bram Timmermans, 2010. "The Danish Integrated Database for Labor Market Research: Towards Demystification for the English Speaking Audience," DRUID Working Papers 10-16, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daniel D. Schnitzlein, 2016. "A New Look at Intergenerational Mobility in Germany Compared to the U.S," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(4), pages 650-667, December.
    2. P. Jenkins, Stephen & Jäntti, Markus, 2013. "Income mobility," ISER Working Paper Series 2013-23, Institute for Social and Economic Research.
    3. Céline Lecavelier des Etangs-Levallois, 2017. "Overview of intergenerational earnings mobility in Germany," THEMA Working Papers 2017-11, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    4. Schnitzlein Daniel, 2009. "Struktur und Ausmaß der intergenerationalen Einkommensmobilität in Deutschland / Structure and Extent of Intergenerational Income Mobility in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(4), pages 450-466, August.
    5. Björklund, Anders & Jäntti, Markus, 2012. "How important is family background for labor-economic outcomes?," Labour Economics, Elsevier, vol. 19(4), pages 465-474.
    6. Paul Hufe & Andreas Peichl & Daniel Weishaar, 2018. "Intergenerationelle Einkommensmobilität: Schlusslicht Deutschland?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(20), pages 20-28, October.
    7. Coban, Mustafa & Sauerhammer, Sarah, 2017. "Transmission channels of intergenerational income mobility: Empirical evidence from Germany and the Unites States," Discussion Paper Series 138, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    8. Silke Anger & Daniel D. Schnitzlein, 2017. "Cognitive skills, non-cognitive skills, and family background: evidence from sibling correlations," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(2), pages 591-620, April.
    9. Huebener, Mathias, 2015. "The role of paternal risk attitudes in long-run education outcomes and intergenerational mobility," Economics of Education Review, Elsevier, vol. 47(C), pages 64-79.
    10. Schnitzlein, Daniel D. & Wunder, Christoph, 2016. "Are We Architects of Our Own Happiness? The Importance of Family Background for Well-Being," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 16(1), pages 125-149.
    11. Mohammad H. Sepahvand & Roujman Shahbazian, 2021. "Sibling correlation in risk attitudes: evidence from Burkina Faso," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(1), pages 45-72, March.
    12. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    13. Bhashkar Mazumder, 2018. "Intergenerational Mobility in the United States: What We Have Learned from the PSID," The ANNALS of the American Academy of Political and Social Science, , vol. 680(1), pages 213-234, November.
    14. Julia Bredtmann & Nina Smith, 2018. "Inequalities in Educational Outcomes: How Important Is the Family?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 80(6), pages 1117-1144, December.
    15. Maia Güell & José V. Rodriguez Mora & Chris Telmer, 2007. "Intergenerational mobility and the informative content of surnames," Economics Working Papers 1042, Department of Economics and Business, Universitat Pompeu Fabra.
    16. René Böheim & Christina Judmayr, 2014. "Chancengleichheit in Österreich," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 134, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    17. Schnitzlein, Daniel D., 2012. "How important is cultural background for the level of intergenerational mobility?," Economics Letters, Elsevier, vol. 114(3), pages 335-337.
    18. Bertha Rohenkohl, 2019. "Intergenerational Income Mobility in the UK:New evidence using the BHPS and Understanding Society," Working Papers 2019017, The University of Sheffield, Department of Economics.
    19. Eisenhauer, Philipp & Pfeiffer, Friedhelm, 2008. "Assessing intergenerational earnings persistence among German workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 119-137.
    20. Markussen, Simen & Røed, Knut, 2017. "Egalitarianism under Pressure: Toward Lower Economic Mobility in the Knowledge Economy?," IZA Discussion Papers 10664, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Sibling correlations; intergenerational mobility; inequality; REML;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. SOEP based publications

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp365. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/sodiwde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.