"A Lifecycle Estimator of Intergenerational Earnings Mobility", IFAU WP 2022:21, co-authors: U. Mello and J. Stuhler
Accepted at the Review of Economics and Statistics
Abstract:
The estimation of intergenerational mobility ideally requires full income histories to determine lifetime incomes. However, as empirical applications are typically based on shorter snapshots, the resulting estimates are subject to lifecycle bias. While the literature has followed different strategies to address this problem, we use long income series from Sweden and the US to illustrate that existing methods struggle to account for one important property of income processes: children from more affluent families tend to experience faster income growth, even conditional on their own observable characteristics. We propose a lifecycle estimator that captures this pattern and show that it performs well across different settings. We then apply this estimator to study mobility trends in Sweden and in the US, including for more recent cohorts that could not be considered in prior work. Our results show that despite rising income inequality, intergenerational income mobility was largely stable over cohorts born 1950-1989 in both Sweden and the US.
"Geographic Variation in Multigenerational Mobility", co-author: J. Stuhler
Accepted at Sociological Methods & Research (special issue)
Abstract:
Using complete-count register data spanning three generations, we document spa- tial patterns in inter- and multigenerational mobility in Sweden. Across municipal- ities, grandfather-child correlations in education or earnings tend to be larger than the square of the parent-child correlations, suggesting that the latter understate sta- tus transmission in the long run. Yet, conventional parent-child correlations capture regional di!erences in long-run transmission and therefore remain useful for compar- ative purposes. We further find that the within-country association between mobility and income inequality (the “Great Gatsby Curve”) is at least as strong in the multi- as in the intergenerational case. Interpreting those patterns through the lens of a latent factor model, we find that regional di!erences in mobility primarily reflect variation in the transmission of latent advantages, rather than in how those advantages translate into observed outcomes.
"Measurement Error and Rank Correlations", Cemmap WP 28/18, co-authors: T. Kitagawa and J. Stuhler
Reject and resubmit at REStat
Abstract:
This paper characterizes and proposes a method to correct for errors-in-variables biases in the estimation of rank correlation coefficients (Spearman's rho and Kendall's tau). We first investigate a set of sufficient conditions under which measurement errors bias the sample rank correlations toward zero. We then provide a feasible nonparametric bias-corrected estimator based on the technique of small error variance approximation. We assess its performance in simulations and an empirical application, using rich Swedish data to estimate intergenerational rank correlations in income. The method performs well in both cases, lowering the mean squared error by 50-85 percent already in moderately sized samples (n= 1000).
"Skills, Parental Sorting, and Child Inequality", (also as IZA DP 15824) co-authors: Plug, E., van der Klaauw, B. and L. Ziegler
Revise and resubmit at the Journal of Human Resources
Abstract:
This paper formulates a simple skill and education model to explain how better access to higher education leads to stronger assortative mating on skills of parents and more polarized skill and earnings distributions of children. Swedish data show that more skilled students increasingly enrolled in college and ended up with more skilled partners and more skilled children. Using educational expansions we find that better college access increases both skill sorting in couples and skill and earnings inequality among their children. All findings support that rising earnings inequality is, at least in part, supply driven by rising skill inequality.
"How Early Career Choices Adjust to Economic Crises", co-authors: Edvin Hertegård, Julien Grenet, Hans Grönqvist and Jan Stuhler
Abstract:
We study how students adjust their early career choices in response to economic crises, and how this behavioral response affects their long-run labor market outcomes. We specifically examine the context of the severe recession that struck Sweden in the early 1990s, which disproportionally affected the manufacturing and construction sectors. We find that students who experienced paternal job loss in these heavily affected sectors were more likely to choose high school programs linked to sectors less impacted by the recession. As a result, these individuals achieved better labor market outcomes in adulthood, including higher employment rates and career earnings. Our findings are consistent with informational frictions being a key obstacle to structural change, and we identify career choice as an important mechanism
through which recessions reshape labor markets in the very long run.
"The Relationship Between Intergenerational Mobility and Equality of Opportunity", co-authors: A. Adermon and G. Brandén
Abstract:
Among economists, empirical analysis of social mobility and the role of parental background is largely carried out in two separate strands of research. The intergenerational mobility literature estimates parent-child persistence in a certain outcome of interest, such as income. In contrast, the equality of opportunity literature is rooted in a normative framework, and has only more recently started generating empirical evidence. Intergenerational mobility regressions are relatively straightforward to estimate, but their normative implications are less obvious. In contrast, measures of equality of opportunity have a policy-relelvant interpretation, but are demanding in terms of data, requiring the researcher to observe a large set of determinants of socioeconomic status for large samples. But maybe the two approaches capture similar underlying dynamics? We compare the two approaches by estimating both equality of opportunity and intergenerational mobility measures — as well as sibling correlations — across 16 birth cohorts within 126 Swedish local labor markets. Using these estimates, we test to what extent the different measures correlate, resulting in insights on the plausibility of interpreting intergenerational mobility measures as informative about equality of opportunity.
Work in progress:
"In Heels and Backwards: The Economic Costs of Women Doing More for Less", with David Autor, Simen Markussen, Pascual Restrepo, Knut Roed, and Anna Salomons
"Labor-Market Drivers of Intergenerational Earnings Persistence", with Erika Forsberg and Jan Stuhler
"Reducing Survivor Pension to Promote More Equal Labor Market Attachment of Women: Evidence from Sweden", with Nadja Dwenger, Johannes Kochems, and Sebastian Siegloch
"Occupational Choice and Family Background: The Role of Borrowing Constraints", with Salvatore Lo Bello, Ursula Mello and Jan Stuhler
"The Long Arm of Recessions: Evidence from Sweden’s Great Economic Crisis", with Mattias Engdahl and Jan Stuhler
"Social Mobility in Western Countries: The Role of Families, Networks and Institutions", with José Rodríguez Mora and Kjell Salvanes, under revision for the Handbook of the Economics of Intergenerational Mobility (eds. S. Durlauf and B. Mazumder)
"Indirect Estimators of Intergenerational Mobility", with Andrea Del Pizzo and Jan Stuhler, under revision for the Handbook of the Economics of Intergenerational Mobility (eds. S. Durlauf and B. Mazumder)
“Like Mother, Like Child? The Rise of Women's Intergenerational Income Persistence in Sweden and the United States”, Journal of Labor Economics, forthcoming, with Gunnar Brandén and Kelly Vosters.
“Interpreting Trends in Intergenerational Mobility”, Journal of Political Economy (lead article), 2024, 132(8), 2531-2570, with Jan Stuhler.
“Measuring Absolute Income Mobility: Lessons from North America and Europe”, American Economic Journal: Applied Economics (lead article), 2024, 16(2): 1-30, with Manduca, R., et al.
"The Rising Return to Noncognitive Skill" (Pre-print version; Online appendix), American Economic Journal: Applied Economics, 2022, Vol 14(2), co-authors: P-A Edin, P. Fredriksson, and B. Öckert
"The Global COVID-19 Student Survey: First Wave Results", Covid Economics: Vetted and Real-time Papers, 79: 152-217, May 2021, co-authors: Jaeger, D., J. Arellano-Bover, K. Karbownik, M. Martínez-Matute, J. Nunley, R. A. Seals, et al. [Online appendix / IZA DP 14419]
"Steady-State Assumptions in Intergenerational Mobility Research", Journal of Economic Inequality, 2019, Vol 17, (special issue in honor of Tony Atkinson), co-author: J. Stuhler
"Top Earners: Cross-Country Facts", Federal Reserve Bank of St. Louis Review, 2018, Vol 100(3), co-authors: A. Badel, M. Daly and M. Huggett
"The Distribution of Lifetime Earnings Returns to College", Journal of Labor Economics (lead article), 2017, Vol 35(4)
"Biases in Standard Measures of Intergenerational Income Dependence", Journal of Human Resources, 2017, Vol 52(3), co-author: J. Stuhler
"Intergenerational Persistence in Latent Socioeconomic Status: Evidence from Sweden", Journal of Labor Economics, 2017, Vol 35(3), co-author: K. Vosters
"The Contribution of Early-Life vs. Labour-Market Factors to Intergenerational Income Persistence: A Comparison of the UK and Sweden", Economic Journal, 2017, Vol 127(605), co-authors: A. Björklund and M. Jäntti (Older version as "The Role of Parental Income over the Life Cycle: A Comparison of Sweden and the UK", IZA, 2012)
"A Comparison of Intergenerational Mobility Curves in Germany, Norway, Sweden, and the United States", Scandinavian Journal of Economics, 2017, Vol 119(1), co-authors: E. Bratberg, J. Davis, B. Mazumder, D. Schnitzlein, and K. Vaage
"Heterogeneous Income Profiles and Life-Cycle Bias in Intergenerational Mobility Estimation", Journal of Human Resources, 2016, Vol 51(1), co-author: J. Stuhler (Previous version available as IZA Discussion Paper No. 5697)
"Parental Education Gradients in Sweden", in Ermisch, J., M. Jäntti and T. Smeeding (eds.), From Parents to Children: The Intergenerational Transmission of Advantage, 2012, New York: Russel Sage, co-authors: A. Björklund and M. Jäntti