Working Paper: NBER ID: w19844
Authors: Raj Chetty; Nathaniel Hendren; Patrick Kline; Emmanuel Saez; Nicholas Turner
Abstract: We present new evidence on trends in intergenerational mobility in the U.S. using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts. For children born between 1971 and 1986, we measure intergenerational mobility based on the correlation between parent and child income percentile ranks. For more recent cohorts, we measure mobility as the correlation between a child's probability of attending college and her parents' income rank. We also calculate transition probabilities, such as a child's chances of reaching the top quintile of the income distribution starting from the bottom quintile. Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the "birth lottery" - the parents to whom a child is born - are larger today than in the past.
Keywords: intergenerational mobility; income inequality; college attendance
JEL Codes: H0; J0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| parent income percentile ranks (D31) | child income percentile ranks (J13) |
| parent income percentile ranks (D31) | children's college attendance rates (I21) |
| children's college attendance rates (I21) | child later earnings (J13) |
| parent income ranks (D31) | probability of child reaching top quintile (I24) |
| income inequality (D31) | intergenerational mobility (J62) |
| parent income ranks (D31) | child outcomes (J13) |