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Consumption and Income Persistence across Generations

Author

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  • Hamish Low

    (University of Cambridge)

  • Aruni Mitra

    (University of British Columbia)

  • Giovanni Gallipoli

    (UBC)

Abstract

We examine the persistence of economic outcomes within families. First, we link parents and children in U.S. longitudinal data and document the cross-generational association in both incomes and ex- penditures. Next, we develop a richer model of intra-family persistence and derive a set of theoretical moment restrictions. This allows us to identify and estimate key parameters describing how different shocks influence long-term economic outcomes. We use these estimates to quantify the contribution of parental factors to the observed dispersion of income and consumption among adult children.

Suggested Citation

  • Hamish Low & Aruni Mitra & Giovanni Gallipoli, 2017. "Consumption and Income Persistence across Generations," 2017 Meeting Papers 1215, Society for Economic Dynamics.
  • Handle: RePEc:red:sed017:1215
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    References listed on IDEAS

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