Nonlinearities in intergenerational earnings mobility: Consequences for cross-country comparisons

A1 Journal article (refereed)


Internal Authors/Editors


Publication Details

List of Authors: Bernt Bratsberg, Knut Røed, Oddbjørn Raaum, Robin Naylor, Markus Jäntti, Tor Eriksson, Eva Österbacka
Publisher: BLACKWELL PUBLISHING
Publication year: 2007
Journal: Economic Journal
Journal acronym: ECON J
Volume number: 117
Issue number: 519
Start page: C72
End page: C92
Number of pages: 21
ISSN: 0013-0133


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.

Last updated on 2019-20-11 at 03:46