Local Measures of Intergenerational Mobility of Income, Cognitive, and Noncognitive Skills

Abstract

Using NLSY data we investigate whether the observed patterns of intergenerational persistence in cognitive and non-cognitive abilities are consistent with the predictions of the genetic hypothesis. In doing so we employ the varying coefficient model to estimate nonparametric (local) measures of intergenerational mobility of income, cognitive, and non-cognitive skills as smooth functions of log parent permanent income. Our findings show that intergenerational mobility exhibits nonlinear patterns. Individuals with different parental income are characterized by different degrees of intergenerational mobility. Moreover, we find evidence that suggests that the genetic component in the overall intergenerational transmission mechanism is much stronger than the epigenetic for both sons and daughters.