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The Decline in Intergenerational Mobility After 1980

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  • Jonathan Davis
  • Bhashkar Mazumder

Abstract

We demonstrate that intergenerational mobility declined sharply for cohorts born between 1957 and 1964 compared to those born between 1942 and 1953. The former entered the labor market largely after the large rise in inequality that occurred around 1980 while the latter entered the labor market before this inflection point. We show that the rank-rank slope rose from 0.27 to 0.4 and the IGE rose from 0.35 to 0.51. The share of children whose income exceeds that of their parents fell by about 3 percentage points. These findings suggest that relative mobility fell by substantially more than absolute mobility.

Suggested Citation

  • Jonathan Davis & Bhashkar Mazumder, 2017. "The Decline in Intergenerational Mobility After 1980," Working Paper Series WP-2017-5, Federal Reserve Bank of Chicago, revised 14 Jan 2022.
    • Handle: RePEc:fip:fedhwp:wp-2017-05
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    2. Godechot, Olivier & Apascaritei, Paula & Boza, István & Henriksen, Lasse Folke & Hermansen, Are Skeie & Hou, Feng & Kodama, Naomi & Křížková, Alena & Jung, Jiwook & Elvira, Marta M. & Melzer, Silvia M, 2020. "The great separation: Top earner segregation at work in high-income countries," MaxPo Discussion Paper Series 20/3, Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo).
    3. Yoosoon Chang & Steven Durlauf & Seunghee Lee & Joon Park, 2023. "A Trajectories-Based Approach to Measuring Intergenerational Mobility," CAEPR Working Papers 2023-004 Classification-C, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
    4. Alberto Alesina & Sebastian Hohmann & Stelios Michalopoulos & Elias Papaioannou, 2021. "Intergenerational Mobility in Africa," Econometrica, Econometric Society, vol. 89(1), pages 1-35, January.
    5. Steven N. Durlauf & Ananth Seshadri, 2018. "Understanding the Great Gatsby Curve," NBER Macroeconomics Annual, University of Chicago Press, vol. 32(1), pages 333-393.
    6. Nathan Deutscher & Bhashkar Mazumder, 2023. "Measuring Intergenerational Income Mobility: A Synthesis of Approaches," Journal of Economic Literature, American Economic Association, vol. 61(3), pages 988-1036, September.
    7. Chris Belfield & Claire Crawford & Ellen Greaves & Paul Gregg & Lindsey Macmillan, 2017. "Intergenerational income persistence within families," IFS Working Papers W17/11, Institute for Fiscal Studies.
    8. Brantly Callaway & Weige Huang, 2018. "Intergenerational Income Mobility: Counterfactual Distributions with a Continuous Treatment," DETU Working Papers 1801, Department of Economics, Temple University.
    9. Olcina, Gonzalo & Calabuig, Vicente, 2021. "Trust and punishment," European Journal of Political Economy, Elsevier, vol. 70(C).
    10. Nizam MelikÅŸah Demirtas & Orhan Torul, 2021. "Intergenerational Income Mobility in Turkey Abstract:," Working Papers 2021/05, Bogazici University, Department of Economics.
    11. George A. Erickcek, 2023. "What is Inclusionary Economic Development—What if Employees Mattered?," Economic Development Quarterly, , vol. 37(1), pages 27-33, February.
    12. Stephen Smith, 2018. "Development Economics Meets the Challenges of Lagging U.S. Areas: Applications to Education, Health and Nutrition, Behavior, and Infrastructure," Working Papers 2018-7, The George Washington University, Institute for International Economic Policy.
    13. Ulrika Ahrsjö & René Karadakic & Joachim Kahr Rasmussen, 2021. "Intergenerational Mobility Trends and the Changing Role of Female Labor," CEBI working paper series 21-19, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).

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    More about this item

    Keywords

    Intergenerational mobility; income; labor markets;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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