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Less Equal and Less Mobile: Evidence of a Decline in Intergenerational Income Mobility in the United States

  • Moshe Justman

    ()

    (Department of Economics, Ben Gurion University, Beer Sheva, Israel; Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Anna Krush

    (Department of Economics, Ben Gurion University, Beer Sheva, Israel)

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    We use PSID data to 2008 to consider changes in the intergenerational elasticity (IGE) of income in fifteen successive ten-year cohort-groups of sons aged 36-45 between 1997 and 2011. Regressing sons’ estimated lifetime income on fathers’ income within each group, we obtain fifteen IGE estimates, which exhibit a significant rising trend, as do intergenerational correlations and rank correlations. The Gini coefficient of sons’ lifetime income within these groups exhibits a correlation of 0.71 with our IGE estimates, leading us to conclude that as the United States has become economically less equal in recent years it has also become less mobile.

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    File URL: http://www.melbourneinstitute.com/downloads/working_paper_series/wp2013n43.pdf
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    Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2013n43.

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    Length: 36pp
    Date of creation: Dec 2013
    Date of revision:
    Handle: RePEc:iae:iaewps:wp2013n43
    Contact details of provider: Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
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    1. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
    2. Susan E. Mayer & Leonard M. Lopoo, 2004. "Has the Intergenerational Transmission of Economic Status Changed?," Working Papers 0414, Harris School of Public Policy Studies, University of Chicago.
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    5. Chul-In Lee & Gary Solon, 2006. "Trends in Intergenerational Income Mobility," NBER Working Papers 12007, National Bureau of Economic Research, Inc.
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    9. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
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    11. Grawe, Nathan D., 2006. "Lifecycle bias in estimates of intergenerational earnings persistence," Labour Economics, Elsevier, vol. 13(5), pages 551-570, October.
    12. O'Connell, Philip J. & Russell, Helen & FitzGerald, John, 2006. "Human Resources," Book Chapters, in: Morgenroth, Edgar (ed.), Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013 Economic and Social Research Institute (ESRI).
    13. Bhashkar Mazumder, 2005. "Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 235-255, May.
    14. Miles Corak & Andrew Heisz, 1998. "The Intergenerational Earnings and Income Mobility of Canadian," Labor and Demography 9808001, EconWPA.
    15. Daniel Aaronson & Bhashkar Mazumder, 2008. "Intergenerational Economic Mobility in the United States, 1940 to 2000," Journal of Human Resources, University of Wisconsin Press, vol. 43(1).
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