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American Exceptionalism in a New Light: A Comparison of Intergenerational Earnings Mobility in the Nordic Countries, the United Kingdom and the United States

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  • Jäntti, Markus

    () (SOFI, Stockholm University)

  • Bratsberg, Bernt

    () (Ragnar Frisch Centre for Economic Research)

  • Røed, Knut

    () (Ragnar Frisch Centre for Economic Research)

  • Raaum, Oddbjørn

    () (Ragnar Frisch Centre for Economic Research)

  • Naylor, Robin

    () (University of Warwick)

  • Österbacka, Eva

    () (Abo Akademi University)

  • Björklund, Anders

    () (SOFI, Stockholm University)

  • Eriksson, Tor

    () (Aarhus School of Business)

Abstract

We develop methods and employ similar sample restrictions to analyse differences in intergenerational earnings mobility across the United States, the United Kingdom, Denmark, Finland, Norway and Sweden. We examine earnings mobility among pairs of fathers and sons as well as fathers and daughters using both mobility matrices and regression and correlation coefficients. Our results suggest that all countries exhibit substantial earnings persistence across generations, but with statistically significant differences across countries. Mobility is lower in the U.S. than in the U.K., where it is lower again compared to the Nordic countries. Persistence is greatest in the tails of the distributions and tends to be particularly high in the upper tails: though in the U.S. this is reversed with a particularly high likelihood that sons of the poorest fathers will remain in the lowest earnings quintile. This is a challenge to the popular notion of 'American exceptionalism'. The U.S. also differs from the Nordic countries in its very low likelihood that sons of the highest earners will show downward 'long-distance' mobility into the lowest earnings quintile. In this, the U.K. is more similar to the U.S..

Suggested Citation

  • Jäntti, Markus & Bratsberg, Bernt & Røed, Knut & Raaum, Oddbjørn & Naylor, Robin & Österbacka, Eva & Björklund, Anders & Eriksson, Tor, 2006. "American Exceptionalism in a New Light: A Comparison of Intergenerational Earnings Mobility in the Nordic Countries, the United Kingdom and the United States," IZA Discussion Papers 1938, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp1938
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    More about this item

    Keywords

    long-run earnings; intergenerational mobility; earnings inequality;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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