Abstract

This study presents a thorough review of the literature on intergenerational income mobility with a focus on the issues regarding consistent estimation of mobility correlations. In the light of the discussions, the intergenerational income association in Turkey is analyzed using OLS and IV estimation strategies. The sample is extracted from Household Budget Surveys and includes father-son and father-daughter pairs with either non-zero wages or non-zero earnings living in the same household in any of the years between 2003 and 2011. OLS and IV estimation strategies are shown to bound the true population mobility correlation from below and above; hence, resulting in a consistent interval estimate of intergenerational mobility. The true mobility correlations in the population are estimated to be in the range of (0.10, 0.51) for sons and (0.17, 1.00) for daughters. The large mobility correlations may call for government intervention to break the harmful income link across generations.

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