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Has the Intergenerational Transmission of Economic Status Changed?

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  • Susan E. Mayer
  • Leonard M. Lopoo

Abstract

We use data from the PSID to assess whether the effect of parental income on son's economic status has changed for cohorts born between 1949 and 1965. We find that the effect of parental income on sons' family income and wages at age thirty declined over this period. This was largely because the effect of parental income on son's years of schooling declined. The decline in the effect of parental income is not part of an overall decline in the effect of family background. The effect of parents' education on sons' economic status did not decline and may have increased and the effect of other family background characteristics hardly changed. We suggest that the decline in the effect of parental income on son's income may be due to the increase in government investment in children, especially in their educational attainment.

Suggested Citation

  • Susan E. Mayer & Leonard M. Lopoo, 2001. "Has the Intergenerational Transmission of Economic Status Changed?," Working Papers 0116, Harris School of Public Policy Studies, University of Chicago.
  • Handle: RePEc:har:wpaper:0116
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    References listed on IDEAS

    as
    1. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 35-78.
    2. John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998. "An Analysis of the Impact of Sample Attrition on the Second Generation of Respondents in the Michigan Panel Study of Income Dynamics," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 300-344.
    3. David Grusky & Thomas DiPrete, 1990. "Recent trends in the process of stratification," Demography, Springer;Population Association of America (PAA), vol. 27(4), pages 617-637, November.
    4. 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.
    5. David I. Levine & Bhashkar Mazumder, 2002. "Choosing the right parents: changes in the intergenerational transmission of inequality between 1980 and the early 1990s," Working Paper Series WP-02-08, Federal Reserve Bank of Chicago.
    6. Pencavel, John, 1998. "Assortative Mating by Schooling and the Work Behavior of Wives and Husbands," American Economic Review, American Economic Association, vol. 88(2), pages 326-329, May.
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