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Mobility Across Multiple Generations: The Iterated Regression Fallacy

  • Stuhler, Jan


    (Universidad Carlos III de Madrid)

Conflicting views about the degree of long-run mobility across multiple generations persist because direct empirical evidence is scarce. Predictions are instead routinely derived by iteration of intergenerational measures, a procedure which implies high long-run mobility even when intergenerational mobility is low. However, the assumption that regression implies perpetual regression is a statistical fallacy. I examine this fallacy, its historical background, and its prevalence. I then present various simple models of intergenerational transmission to consider how the relation between intergenerational and multigenerational mobility is affected by elements of the transmission process. I discuss the role of market luck and indirect transmission; the multiplicity of skills; the role of grandparents; and the causal effect of parental income. The direction of bias depends on modeling assumptions, but elementary properties of the transmission process imply that long-run mobility will likely be lower, possibly much lower, than predictions from intergenerational evidence suggest.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7072.

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Length: 13 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:iza:izadps:dp7072
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  1. Lindahl, Mikael & Palme, Mårten & Sandgren Massih, Sofia & Sjögren, Anna, 2012. "The intergenerational persistence of human capital: an empirical analysis of four generations," Working Paper Series 2012:12, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Gary S. Becker & Nigel Tomes, . "Human Capital and the Rise and Fall of Families," University of Chicago - Population Research Center 84-10, Chicago - Population Research Center.
  3. Goldberger, A.S., 1989. "Economic And Mechanical Models Of Intergenerational Transmission," Working papers 374, Wisconsin Madison - Social Systems.
  4. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-89, December.
  5. Gregory Clark & Neil Cummins, 2013. "Surnames and social mobility: England 1230-2012," Economic History Working Papers 54515, London School of Economics and Political Science, Department of Economic History.
  6. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-32, December.
  7. Jeffrey S. Zax & Daniel I. Rees, 2002. "IQ, Academic Performance, Environment, and Earnings," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 600-616, November.
  8. Conlisk, John, 1974. "Can Equalization of Opportunity Reduce Social Mobility?," American Economic Review, American Economic Association, vol. 64(1), pages 80-90, March.
  9. Piketty, Thomas, 2000. "Theories of persistent inequality and intergenerational mobility," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 8, pages 429-476 Elsevier.
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