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A comparison of intergenerational mobility curves in Germany, Norway, Sweden and the U.S

Author

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  • Bratberg, Espen

    () (Department of Economics, University of Bergen)

  • Davis, Jonathan

    () (Harris School of Public Policy Studies, University of Chicago)

  • Mazumder, Bhashkar

    () (Federal Reserve Bank of Chicago and University of Bergen)

  • Nybom, Martin

    () (SOFI, Stockholm University)

  • Schnitzlein, Daniel

    () (Leibniz University Hannover and DIW Berlin)

  • Vaage, Kjell

    () (Department of Economics, University of Bergen)

Abstract

We use two non-parametric measures to characterize intergenerational mobility (IGM) throughout the income distribution: Rank Mobility and Income Share Mobility. We examine differences in these IGM curves between Germany, Norway, Sweden and the United States using comparable samples. Although we find that these curves are approximately linear through most of the income distribution, non-linearities are important in describing cross-country differences. The linear representations of these curves lead to different conclusions regarding cross-country differences depending on the measure. Using ranks, we find that the U.S. is substantially less intergenerationally mobile than the three European countries which have fairly similar degrees of rank mobility. Despite the substantial heterogeneity in intergenerational rank mobility within the U.S., we show that the most mobile region of the U.S. is still less mobile than the least mobile regions of Norway and Sweden. When we use a linear estimator of Income Share Mobility we find that the four countries have very similar rates of IGM. However, there are some notable cross-country differences at the bottom and the top of the income distribution for both types of mobility. For example, the U.S. tends to experience lower upward mobility at the very bottom of the income distribution according to both measures. We conclude that researchers should be careful in drawing conclusions regarding cross-country differences in intergenerational mobility given that the results may be sensitive to the concept being used and to non-linearities.

Suggested Citation

  • Bratberg, Espen & Davis, Jonathan & Mazumder, Bhashkar & Nybom, Martin & Schnitzlein, Daniel & Vaage, Kjell, 2015. "A comparison of intergenerational mobility curves in Germany, Norway, Sweden and the U.S," Working Papers in Economics 01/15, University of Bergen, Department of Economics.
  • Handle: RePEc:hhs:bergec:2015_001
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    References listed on IDEAS

    as
    1. Corak, Miles & Lindquist, Matthew J. & Mazumder, Bhashkar, 2014. "A comparison of upward and downward intergenerational mobility in Canada, Sweden and the United States," Labour Economics, Elsevier, vol. 30(C), pages 185-200.
    2. Rolf Aaberge & Magne Mogstad, 2014. "Income mobility as an equalizer of permanent income," Discussion Papers 769, Statistics Norway, Research Department.
    3. Martin Nybom & Jan Stuhler, 2017. "Biases in Standard Measures of Intergenerational Income Dependence," Journal of Human Resources, University of Wisconsin Press, vol. 52(3), pages 800-825.
    4. Debopam Bhattacharya & Bhashkar Mazumder, 2011. "A nonparametric analysis of black–white differences in intergenerational income mobility in the United States," Quantitative Economics, Econometric Society, vol. 2(3), pages 335-379, November.
    5. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, Oxford University Press, vol. 129(4), pages 1553-1623.
    6. repec:hrv:faseco:30750027 is not listed on IDEAS
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    Cited by:

    1. Shoshana Grossbard & Lucia Mangiavacchi & William Nilsson & Luca Piccoli, 2019. "Spouses' Income Association and Inequality: A Non-Linear Perspective," Working Papers 2019-076, Human Capital and Economic Opportunity Working Group.
    2. Neidhöfer, Guido & Serrano, Joaquín & Gasparini, Leonardo, 2018. "Educational inequality and intergenerational mobility in Latin America: A new database," Journal of Development Economics, Elsevier, vol. 134(C), pages 329-349.
    3. Bratsberg, Bernt & Markussen, Simen & Raaum, Oddbjørn & Røed, Knut & Røgeberg, Ole J., 2018. "Trends in Assortative Mating and Offspring Outcomes," IZA Discussion Papers 11753, Institute of Labor Economics (IZA).
    4. Jonathan Davis & Bhashkar Mazumder, 2017. "The Decline in Intergenerational Mobility After 1980," Working Paper Series WP-2017-5, Federal Reserve Bank of Chicago, revised 16 Mar 2017.
    5. Chen, Xi & Yan, Binjian & Gill, Thomas M., 2020. "Childhood Circumstances and Health Inequality in Old Age: Comparative Evidence from China and the United States," IZA Discussion Papers 13460, Institute of Labor Economics (IZA).
    6. Martin Nybom & Jan Stuhler, 2017. "Biases in Standard Measures of Intergenerational Income Dependence," Journal of Human Resources, University of Wisconsin Press, vol. 52(3), pages 800-825.
    7. Almås, Ingvild & Kotsadam, Andreas & Moen, Espen R & Røed, Knut, 2019. "The Economics of Hypergamy," CEPR Discussion Papers 13606, C.E.P.R. Discussion Papers.
    8. Bütikofer, Aline & Dalla-Zuanna, Antonio & Salvanes, Kjell G., 2018. "Breaking the Links: Natural Resource Booms and Intergenerational Mobility," Discussion Paper Series in Economics 19/2018, Norwegian School of Economics, Department of Economics.
    9. Sam Asher & Paul Novosad & Charlie Rafkin, 2018. "Partial Identification of Expectations with Interval Data," Papers 1802.10490, arXiv.org.
    10. Maximilian Stockhausen, 2018. "Like Father, Like Son? – A Comparison of Absolute and Relative Intergenerational Labour Income Mobility in Germany and the US," SOEPpapers on Multidisciplinary Panel Data Research 989, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. Sander Wagner, 2017. "Children of the Reunification: Gendered Effects on Intergenerational Mobility in Germany," Working Papers 2017-03, Center for Research in Economics and Statistics.
    12. 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.
    13. Jørgen Modalsli, 2016. "Multigenerational persistence. Evidence from 146 years of administrative data," Discussion Papers 850, Statistics Norway, Research Department.
    14. Hoen, Maria F. & Markussen, Simen & Røed, Knut, 2018. "Immigration and Social Mobility," IZA Discussion Papers 11904, Institute of Labor Economics (IZA).
    15. 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.
    16. 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).
    17. David (David Patrick) Madden, 2019. "BMI Mobility and Obesity Transitions Among Children in Ireland," Working Papers 201922, School of Economics, University College Dublin.
    18. 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.
    19. Tharcisio Leone, 2019. "Intergenerational Mobility in Education: Estimates of the Worldwide Variation," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 44(4), pages 1-42, December.
    20. Toru Kitagawa & Martin Nybom & Jan Stuhler, 2018. "Measurement error and rank correlations," CeMMAP working papers CWP28/18, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    21. Schöb, Ronnie, 2019. "Eine neue solidarische Grundsicherung," Discussion Papers 2019/15, Free University Berlin, School of Business & Economics.
    22. Feld Lars P. & Schmidt Christoph M., 2016. "Jenseits der schrillen Töne," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 17(2), pages 188-205, July.

    More about this item

    Keywords

    rank mobility; income share mobility; cross-country differences;

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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