IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp5245.html
   My bibliography  Save this paper

Empirical Strategies to Eliminate Life-Cycle Bias in the Intergenerational Elasticity of Earnings Literature

Author

Listed:
  • Stuhler, Jan

    (Universidad Carlos III de Madrid)

Abstract

I argue that the empirical strategies for estimation of the intergenerational elasticity of lifetime earnings that are currently employed in the literature might not eliminate bias arising from life-cycle effects. Specifically, I demonstrate that procedures based on the generalized errors-in-variables model suggested by Haider and Solon (2006) or the consideration of differential earnings growth rates across subpopulations may not yield unbiased or consistent estimates. I further argue that instrumental variable estimators will not identify an upper bound for the true population parameter.

Suggested Citation

  • Stuhler, Jan, 2010. "Empirical Strategies to Eliminate Life-Cycle Bias in the Intergenerational Elasticity of Earnings Literature," IZA Discussion Papers 5245, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5245
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp5245.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anders Björklund & Mikael Lindahl & Erik Plug, 2006. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(3), pages 999-1028.
    2. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2009. "Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932-1968," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 671-680, June.
    3. María Cervini Plá, 2009. "Measuring intergenerational earnings mobility in Spain: A selection-bias-free," Working Papers wpdea0904, Department of Applied Economics at Universitat Autonoma of Barcelona.
    4. Nilsen, Øivind Anti & Vaage, Kjell & Aakvik, Arild & Jacobsen, Karl, 2008. "Estimates of Intergenerational Elasticities Based on Lifetime Earnings," IZA Discussion Papers 3709, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Martin Nybom & Jan Stuhler, 2016. "Heterogeneous Income Profiles and Lifecycle Bias in Intergenerational Mobility Estimation," Journal of Human Resources, University of Wisconsin Press, vol. 51(1), pages 239-268.
    2. Bhuller, Manudeep & Mogstad, Magne & Salvanes, Kjell G., 2011. "Life-Cycle Bias and the Returns to Schooling in Current and Lifetime Earnings," IZA Discussion Papers 5788, Institute of Labor Economics (IZA).
    3. Chelsea Murray & Robert Graham Clark & Silvia Mendolia & Peter Siminski, 2018. "Direct Measures of Intergenerational Income Mobility for Australia," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 445-468, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 16, pages 1487-1541, Elsevier.
    2. Jonsson, Jan O. & Mood, Carina & Bihagen, Erik, 2011. "Poverty in Sweden 1991-2007. Change, dynamics, and intergenerational transmission of poverty during economic recession and growth," Working Paper Series 10/2011, Stockholm University, Swedish Institute for Social Research.
    3. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Lindahl, Mikael & Palme, Mårten & Sandgren Massih, Sofia & Sjögren, Anna, 2011. "Transmission of Human Capital across Four Generations: Intergenerational Correlations and a Test of the Becker-Tomes Model," Working Paper Series 2011:18, Uppsala University, Department of Economics.
    5. Nordin , Martin & Rooth, Dan-Olof, 2011. "Ability Heterogeneity in Intergenerational Mobility," Working Papers 2011:18, Lund University, Department of Economics.
    6. Coban, Mustafa & Sauerhammer, Sarah, 2017. "Transmission channels of intergenerational income mobility: Empirical evidence from Germany and the Unites States," Discussion Paper Series 138, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    7. Amin, Vikesh & Lundborg, Petter & Rooth, Dan-Olof, 2011. "Following in Your Father's Footsteps: A Note on the Intergenerational Transmission of Income between Twin Fathers and their Sons," IZA Discussion Papers 5990, Institute of Labor Economics (IZA).
    8. Martin Nybom & Jan Stuhler, 2016. "Heterogeneous Income Profiles and Lifecycle Bias in Intergenerational Mobility Estimation," Journal of Human Resources, University of Wisconsin Press, vol. 51(1), pages 239-268.
    9. Ari Hyytinen & Pekka Ilmakunnas & Edvard Johansson & Otto Toivanen, 2019. "Heritability of lifetime earnings," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(3), pages 319-335, September.
    10. Jan Stuhler, 2018. "A Review of Intergenerational Mobility and its Drivers," JRC Research Reports JRC112247, Joint Research Centre.
    11. Arnaud Chevalier & Colm Harmon & Vincent O’ Sullivan & Ian Walker, 2013. "The impact of parental income and education on the schooling of their children," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-22, December.
    12. Haegeland, Torbjørn & Kirkeboen, Lars & Raaum, Oddbjørn & Salvanes, Kjell G., 2010. "Why Children of College Graduates Outperform their Schoolmates: A Study of Cousins and Adoptees," IZA Discussion Papers 5369, Institute of Labor Economics (IZA).
    13. Mikael Lindahl & Mårten Palme & Sofia Sandgren-Massih & Anna Sjögren, 2014. "A Test of the Becker-Tomes Model of Human Capital Transmission Using Microdata on Four Generations," Journal of Human Capital, University of Chicago Press, vol. 8(1), pages 80-96.
    14. Xia, Xiaoyu, 2016. "Forming wage expectations through learning: Evidence from college major choices," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 176-196.
    15. Sauro Mocetti & Giacomo Roma & Enrico Rubolino, 2022. "Knocking on Parents’ Doors: Regulation and Intergenerational Mobility," Journal of Human Resources, University of Wisconsin Press, vol. 57(2), pages 525-554.
    16. Laurent E. Calvet & Paolo Sodini, 2014. "Twin Picks: Disentangling the Determinants of Risk-Taking in Household Portfolios," Journal of Finance, American Finance Association, vol. 69(2), pages 867-906, April.
    17. Shinsuke Asakawa, 2020. "Can Child Benefits Shape Parents' Attitudes toward Childrearing in Japan?: Effects of Child Benefit Policy Expansions," Discussion Papers in Economics and Business 19-04-Rev.2, Osaka University, Graduate School of Economics.
    18. Bamieh, Omar & Cintolesi, Andrea, 2021. "Intergenerational transmission in regulated professions and the role of familism," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 857-879.
    19. Alessandro Lizzeri & Marciano Siniscalchi, 2008. "Parental Guidance and Supervised Learning," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 1161-1195.
    20. Daron Acemoglu & Tuomas Pekkarinen & Kjell G. Salvanes & Matti Sarvimäki, 2021. "The Making of Social Democracy: The Economic and Electoral Consequences of Norway’s 1936 Folk School Reform," NBER Working Papers 29095, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    generalized errors-in-variables model; intergenerational mobility; intergenerational elasticity of earnings; life-cycle bias;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp5245. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.