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

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  • 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.

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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 365.

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Length: 32 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp365
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Keywords: Sibling correlations; intergenerational mobility; inequality; REML;

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Find related papers by JEL classification:
  • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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  1. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe, 2006. "The Intergenerational Transmission of Risk and Trust Attitudes," IZA Discussion Papers 2380, Institute for the Study of Labor (IZA).
  2. Dohmen Thomas & Falk Armin & Huffman David & Sunde Uwe & Schupp Jürgen & Wagner Gert, 2009. "Individual Risk Attitudes: Measurement, Determinants and Behavioral Consequences," ROA Research Memorandum 007, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  3. Corak, Miles, 2006. "Do Poor Children Become Poor Adults? Lessons from a Cross Country Comparison of Generational Earnings Mobility," IZA Discussion Papers 1993, Institute for the Study of Labor (IZA).
  4. 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.
  5. Schnitzlein, Daniel D., 2011. "How important is cultural background for the level of intergenerational mobility?," IWQW Discussion Paper Series 06/2011, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
  6. 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.
  7. Simona Lorena Comi, 2010. "Family influence on early career outcomes in seven European countries," Economics Bulletin, AccessEcon, vol. 30(3), pages 2054-2062.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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 (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
  14. Bhashkar Mazumder, 2008. "Sibling similarities and economic inequality in the US," Journal of Population Economics, Springer, vol. 21(3), pages 685-701, July.
  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, vol. 15(4), pages 757-772.
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  17. repec:iab:iabzaf:v:41:i:2/3:p:119-137 is not listed on IDEAS
  18. Yuksel, Mutlu, 2009. "Intergenerational Mobility of Immigrants in Germany: Moving with Natives or Stuck in their Neighborhoods?," IZA Discussion Papers 4677, Institute for the Study of Labor (IZA).
  19. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2007. "Family Background and Income during the Rise of the Welfare State: Brother Correlations in Income for Swedish Men Born 1932-1968," IZA Discussion Papers 3000, Institute for the Study of Labor (IZA).
  20. 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 1153-89, December.
  21. 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.
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  23. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Quantifying luck egalitarianism
    by chris dillow in Stumbling and Mumbling on 2011-03-28 13:42:11
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Cited by:

  1. Schnitzlein, Daniel D. & Wunder, Christoph, 2014. "Are we architects of our own happiness? The importance of family background for well-being," Hannover Economic Papers (HEP) dp-539, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  2. Jäntti, Markus & Jenkins, Stephen P., 2013. "Income Mobility," IZA Discussion Papers 7730, Institute for the Study of Labor (IZA).
  3. Aparicio Fenoll, Ainhoa & Oppedisano, Veruska, 2014. "Should I Stay or Should I Go? Sibling Effects in Household Formation," IZA Discussion Papers 8713, Institute for the Study of Labor (IZA).
  4. Schnitzlein, Daniel D., 2011. "How important is cultural background for the level of intergenerational mobility?," Working Papers 11-12, University of Aarhus, Aarhus School of Business, Department of Economics.
  5. Daniel D. Schnitzlein & Christoph Wunder, 2014. "Are We Architects of Our Own Happiness? The Importance of Family Background for Well-Being," SOEPpapers on Multidisciplinary Panel Data Research 700, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Elisabeth Bügelmayer & Daniel D. Schnitzlein, 2014. "Is It the Family or the Neighborhood? Evidence from Sibling and Neighbor Correlations in Youth Education and Health," SOEPpapers on Multidisciplinary Panel Data Research 716, DIW Berlin, The German Socio-Economic Panel (SOEP).
  7. Timothy Halliday & Bhashkar Mazumder, 2014. "A Bayesian Analysis of Sibling Correlations in Health," Working Papers 201426, University of Hawaii at Manoa, Department of Economics.
  8. Biavaschi, Costanza & Giulietti, Corrado & Zimmermann, Klaus F., 2013. "Sibling Influence on the Human Capital of the Left Behind," IZA Discussion Papers 7859, Institute for the Study of Labor (IZA).
  9. Halliday, Timothy J. & Mazumder, Bhashkar, 2014. "An Analysis of Sibling Correlations in Health Using Latent Variable Models," IZA Discussion Papers 8672, Institute for the Study of Labor (IZA).
  10. Björklund, Anders & Jäntti, Markus, 2012. "How important is family background for labor-economic outcomes?," Labour Economics, Elsevier, vol. 19(4), pages 465-474.

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