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Correlations of Brothers' Earnings and Intergenerational Transmission

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  • Bingley, Paul

    () (VIVE - The Danish Centre for Applied Social Science)

  • Cappellari, Lorenzo

    () (Università Cattolica del Sacro Cuore)

Abstract

Correlations between parent and child earnings reflect intergenerational mobility and, more broadly, correlations between siblings' earnings reflect shared community and family background. These earnings relationships capture important aspects of relations in socioeconomic status more generally. We estimate intergenerational transmission and sibling correlations of life-cycle earnings jointly within a unified framework that nests previous models. Using data on the Danish population of father/first-son/second-son triads we find that intergenerational effects account for on average 72 percent of sibling correlations. This share is higher than all previous studies because we allow for heterogeneous intergenerational transmission between families. Sibling correlations exhibit a U-shape over the working life, consistent with differences in human capital investments between families.

Suggested Citation

  • Bingley, Paul & Cappellari, Lorenzo, 2017. "Correlations of Brothers' Earnings and Intergenerational Transmission," IZA Discussion Papers 10761, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10761
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    More about this item

    Keywords

    life-cycle earnings; intergenerational transmission; sibling correlations;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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