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Nonlinearities in Intergenerational Earnings Mobility: Consequences for Cross‐Country Comparisons

Bernt Bratsberg · Knut Røed · Oddbjørn Raaum · Robin A Naylor · Markus Jäntti · Tor Eriksson +1 more

209 citations0/0 files storedThe Economic Journal

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Intergenerational and Educational Inequality Studies Labor market dynamics and wage inequality Income, Poverty, and Inequality

Abstract

We show that the patterns of intergenerational earnings mobility in Denmark, Finland and Norway, unlike those for the US and the UK, are highly nonlinear. The Nordic relationship between log earnings of sons and fathers is flat in the lower segments of the fathers’ earnings distribution – sons growing up in the poorest households have the same adult earnings prospects as sons in moderately poor households – and is increasingly positive in middle and upper segments. This convex pattern contrasts sharply with our findings for the US and the UK, where the relationship is much closer to being linear. As a result, cross‐country comparisons of intergenerational earnings elasticities may be misleading with respect to transmission mechanisms in the central parts of the earnings distribution and uninformative in the tails of the distribution.

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References

1986Human Capital and the Rise and Fall of Families 1979An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility 2016Intergenerational Income Mobility in the United States 2006Life-Cycle Variation in the Association between Current and Lifetime Earnings 2005Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data 2002Cross-Country Differences in Intergenerational Earnings Mobility 2004A model of intergenerational mobility variation over time and place 2002Intergenerational Income Mobility Among Daughters

Cited by

2016The Scandinavian Fantasy: The Sources of Intergenerational Mobility in Denmark and the US 2018Overcoming Poverty and Inequality in South Africa 2013Income Inequality, Equality of Opportunity, and Intergenerational Mobility 2014Income Mobility 2012Intergenerational top income mobility in Sweden: Capitalist dynasties in the land of equal opportunity?2019Long-term decline in intergenerational mobility in the United States since the 1850s

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