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Direct Measures of Intergenerational Income Mobility for Australia

Author

Listed:
  • Murray, Chelsea

    (University of Wollongong)

  • Clark, Robert

    (Australian National University)

  • Mendolia, Silvia

    () (University of Wollongong)

  • Siminski, Peter

    () (University of Technology, Sydney)

Abstract

We present the first Australian estimates of intergenerational mobility that draw on direct observations of income from two generations. Using panel data for three birth cohorts of young adults from the Household, Income and Labour Dynamics Australia survey, the estimated intergenerational income elasticity is 0.28. Correcting for attenuation bias raises this to 0.41. We estimate the rank correlation to be 0.27. We show that Australia has greater mobility than the US and this is not sensitive to methodological choices. We also show that spousal selection and family structure may be important determinants of income persistence across generations.

Suggested Citation

  • Murray, Chelsea & Clark, Robert & Mendolia, Silvia & Siminski, Peter, 2017. "Direct Measures of Intergenerational Income Mobility for Australia," IZA Discussion Papers 11020, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11020
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    References listed on IDEAS

    as
    1. Deborah Cobb-Clark, 2010. "Disadvantage across the Generations: What Do We Know about Social and Economic Mobility in Australia?," The Economic Record, The Economic Society of Australia, vol. 86(s1), pages 13-17, September.
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    3. Martin Nybom & Jan Stuhler, 2016. "Heterogeneous Income Profiles and Lifecycle Bias in Intergenerational Mobility Estimation," Journal of Human Resources, University of Wisconsin Press, vol. 51(1), pages 239-268.
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    5. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, vol. 96(4), pages 1308-1320, September.
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    7. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    8. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez & Nicholas Turner, 2014. "Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility," American Economic Review, American Economic Association, vol. 104(5), pages 141-147, May.
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    11. 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.
    12. Thorsten Vogel, 2006. "Reassessing Intergenerational Mobility in Germany and the United States: The Impact of Differences in Lifecycle Earnings Patterns," SFB 649 Discussion Papers SFB649DP2006-055, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
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    Keywords

    intergenerational mobility; Australia; HILDA;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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