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

Bernt Bratsberg, Knut Røed, Oddbjørn Raaum, Robin Naylor, Markus Jäntti, Tor Eriksson, Eva Österbacka

    Research output: Contribution to journalArticleScientificpeer-review

    97 Citations (Scopus)

    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.
    Original languageUndefined/Unknown
    Pages (from-to)C72–C92
    Number of pages21
    JournalEconomic Journal
    Volume117
    Issue number519
    DOIs
    Publication statusPublished - 2007
    MoE publication typeA1 Journal article-refereed

    Cite this