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The Different Sources of Intergenerational Income Mobility in High and Low Income Families

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  • Hjorth-Trolle, Anders

    (Rockwool Foundation Research Unit)

  • Landersø, Rasmus

    (Rockwool Foundation Research Unit)

Abstract

This paper studies intergenerational income mobility using register data for 630,000 Danish children and their parents. We document substantial mobility differences across parents' income levels. Decomposing the mobility estimates shows that for children from low income families, intergenerational income persistence is exclusively explained by parents' influence on children's employment. As parents' income increases, education becomes an increasingly dominant factor, except among children from the top-5% where intergenerational income persistence is driven by capital income likely through bequests and business contacts. Finally, we find that progressive public transfers such as those in Denmark suppress the importance of intergenerational transmission of employment.

Suggested Citation

  • Hjorth-Trolle, Anders & Landersø, Rasmus, 2024. "The Different Sources of Intergenerational Income Mobility in High and Low Income Families," IZA Discussion Papers 17411, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17411
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    References listed on IDEAS

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    1. Björklund, Anders & Roine, Jesper & Waldenström, Daniel, 2012. "Intergenerational top income mobility in Sweden: Capitalist dynasties in the land of equal opportunity?," Journal of Public Economics, Elsevier, vol. 96(5), pages 474-484.
    2. Rasmus Landersø & James J. Heckman, 2017. "The Scandinavian Fantasy: Sources of Intergenerational Mobility in Denmark and the US," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(1), pages 178-230, January.
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    More about this item

    Keywords

    income mobility; education; employment; public transfers;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • 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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