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Differences in Intergenerational Mobility across the Earnings Distribution

Rosemary Hyson


There is a broad range of work which looks at the transmission of various outcomes-earnings, education, and poverty-between parents and children. If a society is concerned with ensuring equal opportunity for all its members, then it is important to understand the extent to which such outcomes are transmitted from one generation to the next. The degree to which outcomes are transmitted, however, is likely to be related to socioeconomic circumstances and may result in different degrees of intergenerational mobility across groups. In this paper, I examine whether or not the transmission of earnings from parents to children differs across the distribution of parent earnings. I examine non-linearities in the intergenerational earnings mobility using semi-parametric estimates of the relationship between father and children's earnings. When I allow for a flexible, non-linear relationship between father's and children's earnings, it appears that parental earnings have the greatest effect in the middle of the distribution. Hypothesis tests indicate that the effect of father's earnings is significantly greater for daughters and sons in the middle and upper portions of the distribution than for those at the bottom.