Research

Abstract: 

Studying a dynamic model of intergenerational transmission, we show that past events affect contemporaneous trends in intergenerational mobility. Structural changes may generate long-lasting mobility trends that can be non-monotonic, and declining mobility may reflect past gains rather than a recent deterioration of equality of opportunity. We provide two applications. We first show that offsetting changes in the parent generation may explain why, despite rising skill premia, income mobility has remained stable in the US. We then show that a Swedish school reform reduced the transmission of inequalities in the directly affected generation, but increased their persistence in the next.

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).

Abstract: 

This chapter provides an overview of the literature on intergenerational income mobility. The chapter centers on the (descriptive) measurement of mobility, but also provides a brief discussion of some of the relevant theory about how incomes are transmitted across generations. Three aspects of empirical research are considered. First, we discuss the type of data that are required to produce credible mobility estimates, in a broad sense. Second, we consider the measurement issues that arise from the approximation of lifetime using short-run income. We finally review the evidence on changes in income mobility over time, with a focus on the more recent developments.

Abstract: 

We use linked parent-child administrative data for five countries in North America and Europe, and detailed survey data for two more, to investigate methodological challenges in the estimation of absolute income mobility. We show that the commonly used “copula and marginals” approximation methods perform well across countries in our sample, and the greatest challenges to their accuracy stem not from assumptions about relative mobility rates over time but from the use of non-representative marginal income distributions. We also provide a multi-country analysis of sensitivity to specification decisions related to age of income measurement, income concept, family structure, and price index.

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.

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.

Abstract: 

We show how intergenerational mobility has evolved over time in Sweden and the United States since 1985, focusing on prime-age labor incomes of both men and women. Income persistence involving women (daughters and/or mothers) has risen substantially over recent decades in both Sweden and the US, while the more predominantly studied father-son measures remained roughly stable. Interestingly, mother-son and mother-daughter persistence levels are very similar as they rise through the sample period, also to nearly the same levels in both countries, contrary to well-established elevated levels of persistence in the US relative to Sweden. We develop a model to quantify the relative roles of parent human capital, employment, and (residual) income, as well as assortative mating. Despite very similar trends and levels for mothers in the US and Sweden, we find substantial differences in the roles of employment and assortative mating over time, consistent with the staggered timing in women’s spike in labor force attachment. Parental assortative mating is also an important factor in both countries, though negative sorting on (residual) income in the US negates the upward influence of positive human capital sorting, lending to the similar cross-country levels of mother-child persistence.

Abstract: 

University students have been particularly affected by the COVID-19 pandemic. We present results from the first wave of the Global COVID-19 Student Survey, which was administered at 28 universities in the United States, Spain, Australia, Sweden, Austria, Italy, and Mexico between April and October 2020. The survey addresses contemporaneous outcomes and future expectations regarding three fundamental aspects of students’ lives in the pandemic: the labor market, education, and health. We document the differential responses of students as a function of their country of residence, parental income, gender, and for the US their race.