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Intergenerational Earnings Mobility and the Inheritance of Employers

  • Corak, Miles

    ()

    (University of Ottawa)

  • Piraino, Patrizio

    ()

    (Statistics Canada)

Our analysis of intergenerational earnings mobility modifies the Becker-Tomes model to incorporate the intergenerational transmission of employers, which is predicted to increase the intergenerational elasticity of earnings. About 6% of young Canadian men have the same main employer as their fathers but this is positively related to paternal earnings and rises discretely at the top of the distribution. We use a switching regression model and identify two regimes associated with the inheritance of employers that have different intergenerational earnings elasticities. The model also demonstrates that the inheritance of employers plays a role in understanding observed nonlinearities.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4876.

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Length: 40 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:iza:izadps:dp4876
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