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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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  • 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
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    1. Quantifying luck egalitarianism
      by chris dillow in Stumbling and Mumbling on 2011-03-28 18:42:11

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    Cited by:

    1. 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.
    2. Mäder Miriam & Schwientek Caroline & Riphahn Regina T. & Müller Steffen, 2015. "Intergenerational Transmission of Unemployment – Evidence for German Sons," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 355-375, August.
    3. Lindquist, Matthew J. & Sol, Joeri & van Praag, Mirjam C. & Vladasel, Theodor, 2016. "On the Origins of Entrepreneurship: Evidence from Sibling Correlations," IZA Discussion Papers 10278, Institute of Labor Economics (IZA).
    4. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Ainhoa Aparicio-Fenoll & Veruska Oppedisano, 2016. "Should I stay or should I go? Sibling effects in household formation," Review of Economics of the Household, Springer, vol. 14(4), pages 1007-1027, December.
    6. 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, ZBW - Leibniz Information Centre for Economics, pages 125-149.
    7. Elisabeth Bügelmayer & Daniel D. Schnitzlein, 2018. "Is it the family or the neighborhood? Evidence from sibling and neighbor correlations in youth education and health," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(3), pages 369-388, September.
    8. Costanza Biavaschi & Corrado Giulietti & Klaus F. Zimmermann, 2015. "Sibling Influence on the Human Capital of the Left-Behind," Journal of Human Capital, University of Chicago Press, vol. 9(4), pages 403-438.
    9. Timothy J. Halliday & Bhashkar Mazumder, 2017. "An Analysis of Sibling Correlations in Health using Latent Variable Models," Health Economics, John Wiley & Sons, Ltd., vol. 26(12), pages 108-125, December.
    10. 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.
    11. 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.
    12. 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.
    13. Schnitzlein, Daniel D., 2012. "How important is cultural background for the level of intergenerational mobility?," Economics Letters, Elsevier, vol. 114(3), pages 335-337.
    14. Eschelbach Martina, 2015. "Family Culture and Fertility Outcomes – Evidence from American Siblings," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(3), pages 246-267, June.
    15. Jakobsen, Kristian Thor & Kaarsen, Nicolai & Vasiljeva, Kristine, 2016. "Does reduced cash beneit worsen educational outcomes of refugee children?," MPRA Paper 72008, University Library of Munich, Germany.
    16. Timothy Halliday & Bhashkar Mazumder, 2014. "A Bayesian Analysis of Sibling Correlations in Health," Working Papers 201426, University of Hawaii at Manoa, Department of Economics.
    17. Eschelbach Martina, 2015. "Family Background and Educational Attainment – Are there Birth Order Effects in Germany?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(1), pages 41-60, February.
    18. Anger, Silke & Schnitzlein, Daniel D., 2013. "Like Brother, Like Sister? The Importance of Family Background for Cognitive and Non-Cognitive Skills," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80052, Verein für Socialpolitik / German Economic Association.
    19. René Böheim & Christina Judmayr, 2014. "Bildungs- und Einkommenskorrelationen von Geschwistern in Österreich," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 40(4), pages 531-557.
    20. Björklund, Anders & Jäntti, Markus, 2012. "How important is family background for labor-economic outcomes?," Labour Economics, Elsevier, vol. 19(4), pages 465-474.
    21. Karin Hederos & Markus Jäntti & Lena Lindahl, 2017. "Gender and inequality of opportunity in Sweden," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 605-635, December.

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    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

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