Intergenerational Income Mobility Research Articles

Income mobility and crime: a hierarchical cluster analysis on principal components for 27 OECD countries

PurposeThe aim of this paper is to investigate the linkages between intergenerational income mobility and crime for 27 OECD countries, considering different types of crime, family ties, enforcement, in terms of punishment rate and perceived quality of the legal system, redistributive outcomes and government expenditure.Design/methodology/approachUsing the Global Database of Intergenerational Mobility (GDIM), the empirical analysis is conducted by coupling the principal components analysis with the hierarchical clustering. The variance tests verify the robustness of the clusters.FindingsIncome mobility is higher in those countries where there is high public investment devoted to education and high perception of rule of law to buffer the adverse effects of crime on income mobility. The redistributive policies must be oriented to better the wealth distribution and not only income equality opportunity to decrease crime and to increase income mobility. A plausible existence of “hidden” income mobility emerges from the linkages between income mobility and frauds.Social implicationsMore redistributive policies for education, income and wealth equality should be applied in those countries with low income mobility and high violent crime rates; higher punishment rates should be applied to reduce the rates of thefts and frauds in high income mobility countries.Originality/valueThe main contribution is the identification of what type of crime leads to downward income mobility, as well as the role of perceived quality of the legal system, government and family ties in the association between income mobility and crime, suggesting also the potential existence of “hidden” income mobility.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-07-2023-0520

Childhood behavior problems and adverse economic outcomes: a 30-year population-based study of intergenerational income mobility.

The objectives of this study were to (a) assess the associations between early behavioral problems and intergenerational income mobility (i.e., the degree to which income status is transmitted from one generation to the next), (b) verify whether these associations are moderated by child sex, and (c) explore indirect effects of early behavioral problems on income mobility via high school graduation. Data were drawn from the Quebec Longitudinal Study of Kindergarten Children (n = 3,020; 49.17% girls). Participants were followed from age 6 to 37 years. Measures included parents' and teachers' ratings of behavioral problems at age 6 years as well as participants' (ages 30-35 years) and their parents' (when participants were aged 10-19 years) income data obtained from tax return records. Regression models were used to predict upward and downward mobility (i.e., increased or decreased income status from one generation to the next) from attention-deficit/hyperactivity problems, conduct/opposition problems, depression/anxiety problems, prosociality, and the quality of children's relationship with their caregiver. Two-way interaction effects between behavioral problems and child sex were examined and indirect effect models including high school graduation as a mediator of these associations were conducted. Despite their higher educational attainment, females had lower incomes and experienced lower upward (but higher downward) income mobility than males. For both females and males, higher levels of attention-deficit/hyperactivity and conduct/opposition problems were associated with decreased odds of upward mobility, whereas higher levels of attention-deficit/hyperactivity were associated with increased odds of downward mobility. Attention-deficit/hyperactivity problems, conduct/opposition problems as well as low prosociality were associated with lower educational attainment (no high school diploma), which in turn was associated with increased odds of downward mobility. Results highlight the importance of providing intensive support to children with early behavioral problems as a means of improving educational attainment and intergenerational income mobility.

Partially Linear Models Under Data Combination

Abstract We study partially linear models when the outcome of interest and some of the covariates are observed in two different datasets that cannot be linked. This type of data combination problem arises very frequently in empirical microeconomics. Using recent tools from optimal transport theory, we derive a constructive characterization of the sharp identified set. We then build on this result and develop a novel inference method that exploits the specific geometric properties of the identified set. Our method exhibits good performances in finite samples, while remaining very tractable. We apply our approach to study intergenerational income mobility over the period 1850-1930 in the United States. Our method allows us to relax the exclusion restrictions used in earlier work, while delivering confidence regions that are informative.

Intergenerational mobility of earnings in rural China

ABSTRACT Due to dataset limitations, the results from previous studies on intergenerational income mobility in rural China are inconsistent. Using panel data from the Chinese Health and Nutrition Survey, this study develops a modified version of the model by Zimmerman [Zimmerman DJ (1992) Regression towards mediocrity in economic stature. Am Econ Rev 82(3):409–429] and estimates the intergenerational earnings mobility in rural China. The new estimate demonstrates that intergenerational earnings elasticity is likely greater than 0.5, suggesting a relatively low rate of intergenerational mobility.

Cohort-Specific Experiences of Industrial Decline and Intergenerational Income Mobility

Abstract The United States manufacturing industry has long been regarded as the economic engine that built and sustained the middle class. In recent decades, this pillar of economic opportunity has eroded substantially. Though much has been written about the decline of manufacturing sectors in United States communities, the potential consequences for economic mobility, and stratification processes more generally, remain largely unexplored. In this study, I develop a conceptual framework linking the study of labor market change to economic stratification. I examine how structural changes to United States labor markets have altered opportunities for economic advancement in the United States. I focus the analysis on birth cohorts in the 1980s, whose labor market entry spans the large-scale erosion of the manufacturing industry in the 2000s. I find strong evidence that declines in manufacturing employment have contributed to growing geographic disparities in upward intergenerational income mobility. Children raised in counties that experienced large contractions in manufacturing industries throughout adolescence experienced large economic penalties in adulthood via reduced levels of upward mobility. The results demonstrate how long-term macroeconomic changes can disrupt and redistribute opportunities within societies.

A study on altruistic consumption of Chinese residents from the perspective of intergenerational income mobility.

Resident consumption is an important link to smooth the domestic circulation and promote the economy to achieve high-quality development. To stimulate the vitality of residents' consumption and achieve the expansion and quality of consumption, we should not only focus on the scale and willingness of residents to consume, but also consider the motivation of consumption. The paper analyzes the impact of intergenerational income mobility on residents' marginal propensity to consume and consumption altruism motive by expanding the Over Lapping Generation Models and combining the China Family Panel Studies (CFPS) data. The results of the study show: Intergenerational Income Elasticity has a significant positive effect on residents' marginal propensity to consume. When Intergenerational Income Elasticity increases, the "altruistic motive" of residents' consumption will also increase significantly. Compared with rural residents, Intergenerational Income Elasticity has a stronger positive effect on urban residents' marginal propensity to consume and marginal propensity to consume education. With the effect of intergenerational factors, urban residents' consumption shows stronger altruistic motives.

국민건강보험 빅데이터를 이용한 한국의 세대 간 소득이동성 연구

Problems of intergenerational conflict and inequality are emerging not only in Korea but also around the world, and in particular, pessimism is spreading not only about inequality in results, but also inequality in the process and opportunities leading to results. This study investigates opportunity inequality in Korean society by analyzing the relationship between the income of the parents' generation and the children's generation, called as intergenerational income mobility, using the income quintile of parents and children of NHIS data. In addition to the parental effect, income mobility can also be influenced by children's characteristics and the regional characteristics of their living environment, so we aim to examine the extent to which these factors affect income mobility. The analysis shows that there is a significant relationship between parents' income levels and children's income levels, and that there are differences in mobility across regions. The analysis also shows that the effect of factors influencing children's income varies across regions. Finally, we found that when discussing inequality of opportunity and intergenerational income mobility in Korea, it is important to properly consider the characteristics of the data and the impact of relevant factors, such as the proposed measure of income mobility.

Intergenerational income mobility trends in Canada

AbstractWe document the rise the intergenerational transmission of income using newly updated administrative Canadian tax data for children born between the early 1960s and the mid‐1980s. We show that children whose parents were in the bottom income quintile have become less likely to exit the bottom quintile once in adulthood and less likely to transition into the middle class. Declining mobility is observed both at the national and provincial level. While federal and provincial policy‐makers should worry about the rise in the strength of the poverty trap, the impact of recent policy developments on children that have yet to become adults remains to be documented.

Early-life impairments, chronic health conditions, and income mobility.

Individuals who have congenital conditions or become disabled early in life tend to have poorer educational and occupational outcomes than non-disabled individuals. Disability is known to be a complex entity with multiple causations, involving, inter alia, physiological, social, economic, and cultural factors. It is established that social factors can influence educational and occupational attainment for disabled people, and current disability policy in many countries, particularly in the Global North, stress the importance of equality of opportunity. However, there is a scarcity of research that explores the specific degrees to which advanced welfare states contribute to the equalization of life chances for individuals with early-life impairments and chronic health conditions. In this study, we use a Norwegian sample of high-quality register data on individuals with vision loss, hearing loss, physical impairment, type 1 diabetes, asthma, and Down syndrome diagnosed early in life and compare their intergenerational income mobility trajectories with a random sample drawn from the country's entire population. We find that individuals' early-life diagnoses are linked to significantly worse income outcomes in adulthood than what is observed among the general population. We conclude that even in one of the most advanced egalitarian welfare states, such as Norway, much remains to be done to equalize life chances for individuals with early-life impairments and chronic health conditions.

Joint effects of US area-level social mobility & income inequality on mortality: an ecological study

Abstract Background Income inequality and its relationship with health has been extensively studied. Intergenerational income mobility (IGIM) has received less attention, but may be an important independent mechanism explaining health inequalities. Methods We conducted ecological analyses of the effects of IGIM and income inequality on mortality across commuting zones (CZ) in the US. IGIM was measured using rank-rank slope, i.e. the correlation between household income rank at age 15-19 and own income rank at age 29-30. We used CZ-level IGIM data from the Opportunity Insights project, Gini index of inequality from the American Community Survey, and mortality rates from CDC WONDER. Cross-sectional and longitudinal (CZ fixed effects) regression models were fitted adjusting for mean income and weighted by population. Results CZs with higher IGIM between 1995-2001 and 2011-12 had lower age-standardised mortality in 2009-2013, with 53.9 (95% CI: 48.9-58.9) fewer deaths per 100,000 for a standard deviation (SD) increase in IGIM (adjusting for mean income and Gini index in 2009-2013). This equates to 778 (773-783) deaths at the lower quartile vs. 710 (705-715) at the upper. Income inequality had a negligible association at 1.1 (-5.0, 7.3) deaths per SD increase. Longitudinal analysis across three 5-year periods confirmed that within-CZ changes in infant mortality were predicted by changes in IGIM (32.0 [12.7-51.2] fewer deaths per SD increase) but not income inequality (4.5 [-12.0, 20.9] deaths per SD increase). Conclusions Preliminary evidence suggests IGIM is a more important indicator for population health than income inequality. European researchers and public health bodies should further research and monitor IGIM, which may require improved availability of intergenerationally linked income data. Policy measures that improve social mobility, such as education and early-years interventions, may have greater health effects than policies only aiming at resource redistribution. Key messages • Differences in intergenerational income mobility accounted for substantial differences in mortality across US commuting zones, while income inequality appeared relatively unimportant. • European policymakers should put greater emphasis on social mobility as an economic determinant of health, and facilitate research using intergenerationally linked income data.

Family, community, and the rural social mobility advantage

Children born into poverty in rural America achieve higher average income levels as adults than their urban peers. As economic opportunity tends to be more abundant in cities, this "rural advantage" in income mobility seems paradoxical. This article resolves this puzzle by applying multilevel analysis to new spatial measures of rurality and place-level data on intergenerational income mobility. We show that the high level of rural income mobility is principally driven by boys of rural-origin, who are more likely than their urban peers to grow up in communities with a predominance of two-parent households. The rural advantage is most pronounced among Whites and Hispanics, as well as those who were raised in the middle of the country. However, these dynamics are more nuanced for girls. In fact, girls from lower-income rural households exhibit a disadvantage in their personal income attainment, partly due to the persistence of traditional gender norms. These findings underscore the importance of communities with strong household and community supports in facilitating later-life income mobility, particularly for boys. They also challenge the emerging consensus that attributes the rural income mobility advantage to migration from poorer rural areas to wealthier towns and cities.

Intergenerational income mobility in France: A comparative and geographic analysis

We provide new estimates of intergenerational income mobility in France for children born in the 1970s using rich administrative data. Since parents’ incomes are not observed, we employ a two-sample two-stage least squares estimation. We show, using the Panel Study of Income Dynamics, that this method slightly underestimates rank-based measures of intergenerational persistence. Our results suggest France is characterized by a strong persistence relative to other developed countries. 9.7% of children born to parents in the bottom 20% reach the top 20% in adulthood, four times less than children from the top 20%. We uncover substantial spatial variations in intergenerational mobility across departments, and a positive relationship between geographic mobility and intergenerational upward mobility. The expected income rank of individuals from the bottom of the parent income distribution who moved towards high-income departments is around the same as the expected income rank of individuals from the 75th percentile who stayed in their childhood department.

Measuring Intergenerational Income Mobility: A Synthesis of Approaches

The literature on intergenerational income mobility uses a diverse set of measures and there is limited knowledge about whether these measures provide similar information and yield similar conclusions. We provide a framework to highlight the key concepts and properties of the different estimators. We then show how these measures relate to one another empirically. Our main analysis uses income tax data from Australia to produce a comprehensive set of empirical estimates for each of 19 different mobility measures at both the national and regional levels. We supplement this analysis with other data that uses either within- or between-country variation in mobility measures. A key finding is that there is a clear distinction between relative and absolute measures both conceptually and empirically. A region may be high with respect to absolute mobility but could be low with respect to relative mobility. However, within broad categories, the different mobility measures tend to be highly correlated. For rank-based estimators, we highlight the importance of how the choice of the distribution used for calculating ranks can play a critical role in determining its properties as well as affect empirical findings. These patterns of results are important for policymakers whose local economy might fare well according to some mobility indicators but not others. (JEL D31, H24, I32, J62)

Intergenerational income mobility in Turkey

Intergenerational income mobility in Turkey

Understanding Patterns and Trends in Income Mobility through Multiverse Analysis

Rising inequalities in rich countries have led to concerns that the economic ladder is getting harder to climb. Yet, research on trends in intergenerational income mobility finds conflicting results. To better understand this variation, we adopt a multiverse approach that estimates trends over 82,944 different definitions of income mobility, varying how and for whom income is measured. Our analysis draws on comprehensive register data for Swedish cohorts born 1958 to 1977 and their parents. We find that income mobility has declined, but for reasons neglected by previous research: improved gender equality in the labor market raises intergenerational persistence in women’s earnings and the household incomes of both men and women. Dominant theories that focus on childhood investments have blinded researchers to this development. Methodologically, we show how multiverse analysis can be used with abduction—inference to the best explanation—to improve theory-building in social science.

The impact of intergenerational income mobility on internal migration in China

AbstractThis study examines the impact of income mobility on internal migration across prefectures in China. We use income intergenerational persistence to evaluate income mobility and find that migrants prefer cities with higher income mobility. We further use the instrumental variable estimation and a set of robustness tests to verify the reliability of our findings. The influence is larger among women, the elderly, and the less‐educated, while the economic prosperity of destinations could relatively offset the negative effect of lower income mobility on migration. Additionally, higher mobility not only attracts but also retains migrants, hence benefiting the local economy. Through further exploration, we find that the real migration influencing factor underlying the higher income mobility is the higher job mobility, indicating that the real pursuit of Chinese migrants is the increased access to suitable job opportunities.

Intergenerational income mobility: New evidence from the UK

Intergenerational income mobility: New evidence from the UK

The Impact of Privileged Classroom Friends on Adult Income and Income Mobility: A Study of a Swedish Cohort Born in 1953

Abstract Social relationships across and within generations are associated with intergenerational income mobility. Parents affect their children’s future opportunities through socialization and by conveying various resources to the child during upbringing. However, self-acquired social contacts of children, such as friendships in school, might also affect long-term outcomes. Children from less privileged homes may gain access to additional resources through contact with privileged friends and their parents. This study examines whether having a classroom friend with high parental income (privileged friend) is associated with upward income mobility. Furthermore, it explores where in the parental income distribution a privileged friend matters most. We use data from the Stockholm Birth Cohort Multigenerational Study (n = 10,641), which is a prospective study of individuals born in 1953 who lived in the greater Stockholm area in 1963. We fit classroom fixed-effects models to estimate the association between having a privileged childhood friend and adult income as well as parental income and adult income along with the interaction of privileged friend and parental income. Results show that cohort members who had a privileged classroom friend had higher adult income, and that this income gain was greater among those whose parents belonged to the lowest income quartile, compared with those whose parents had higher incomes. These results are robust to adjustments for childhood socioeconomic background, personal attributes, and adult educational attainment. Our findings indicate that having an economically privileged friend in the school class bolsters adult income and upward income mobility of children from families with low income.

Birth order and intergenerational income mobility in Japan: Is the first‐born child different?

AbstractThis study examines how birth order affects intergenerational income mobility (IGM) in Japan, focusing on the difference in IGM between firstborn and later‐born children. The elasticities of sons’ income with respect to fathers’ income are separately estimated for sons who are firstborn and sons who are later born by family size using a two‐sample, two‐stage least squares approach. For sons born in 1926–1981, this study finds that in families with four or more children, intergenerational income elasticity (IGE) for firstborn sons is substantially and significantly higher than that for later‐born sons. However, no significant birth order effects are found in households with two or three children.

Black-White Trends in Intergenerational Educational Mobility: A Positional Analysis

This article examines black-white differences in intergenerational educational mobility for cohorts born in the United States during 1915–84. Using a novel mobility measure based on relative educational positions, the author compares racial mobility flows across the entire schooling distribution. The empirical analysis reveals widespread equalization among blacks and whites in upward mobility out of the bottom of the schooling distribution but widespread persistence in black disadvantage in downward mobility out of the top of the schooling distribution. These findings are consistent with a pattern of differentially maintained educational advantage, suggesting a lasting significance of race among well-educated families. The author presents some possible explanations for these findings and discusses how they align with reported black-white differences in intergenerational income mobility.