Multigenerational Mobility

Paper Session

Saturday, Jan. 7, 2017 10:15 AM – 12:15 PM

Hyatt Regency Chicago, Michigan 3
Hosted By: American Economic Association
  • Chair: James Feigenbaum, Harvard University

Multi-Generational Mobility in the United States Since 1850

Joseph Ferrie
,
Northwestern University

Abstract

Using new representative data drawn from U.S. census records and the Current Population Survey, we assess changes in intergenerational income mobility 1850-2015. We focus on both parent-child transmission of economic status and the transmission of status from more distant generations -- up to six in all. We find that parent-child mobility peaked 1880-1910 and has fallen since then. This is consistent with other work we have done on the correlation of educational attainment across generations. We find consistent evidence that grandparents exerted an influence on the income of their grandchildren even after controlling for the direct effect of parents on children and that this influence has increased since 1940. The grandparent effect exceeds what we would anticipate if the transmission process was AR(1). The failure to account for the effect of grandparents in previous mobility studies has led to an overestimate of mobility in recent decades of as much as 25%.

Intergenerational Wealth Mobility and the Role of Inheritance: Evidence From Multiple Generations

Adrian Adermon
,
Uppsala University
Mikael Lindahl
,
University of Gothenburg
Daniel Waldenstrom
,
Uppsala University

Abstract

This study estimates intergenerational correlations in mid-life wealth across three generations, and a young fourth generation, and examines how much that can be explained by inheritances. Using new unique Swedish evidence we find parent-child rank correlations of 0.3–0.4 and grandparents-grandchild rank correlations of 0.1-0.2. Bequests and gifts strikingly account for between half and three fourths of the wealth correlation while income and education explain little. We are also the first to compare estimates using wealth in mid-life to estimates using wealth at death.

Three-Generation Mobility in the United States, 1850-1940: The Role of Maternal and Paternal Grandparents

Claudia Olivetti
,
Boston College and NBER
M Daniele Paserman
,
Boston University
Laura Salisbury
,
York University

Abstract

This paper estimates intergenerational elasticities across three generations in the United States in the late 19th and early 20th centuries. We extend the methodology in Olivetti and Paserman (2015) to explore the role of maternal and paternal grandfathers for the transmission of economic status to grandsons and granddaughters. We document three main findings. First, grandfathers matter for income transmission, above and beyond their effect on fathers' income. Second, the socio-economic status of grandsons is influenced more strongly by paternal grandfathers than by maternal grandfathers. Third, maternal grandfathers are more important for granddaughters than for grandsons, while the opposite is true for paternal grandfathers. We present a model of multi-trait matching and inheritance that can rationalize these findings.

Multigenerational Persistence: Evidence From 146 Years of Administrative Data

Jorgen Modalsli
,
Statistics Norway and University of Oslo

Abstract

There is increasing evidence that intergenerational transmission of economic characteristics goes beyond what can be measured by parent-child associations. However, existing studies are based on samples from small geographic areas or particular time periods, making it hard to know to what extent these multigenerational processes can be generalized across space and time, and how they depend on the measurement of economic outcomes.
This paper uses Norwegian census data on occupational associations among grandfathers, fathers and sons from 1865 to 2011 and finds significant grandparental influence throughout the period. In particular, the additional grandparental influence is strong for white-collar occupations. The findings are robust to alternative ways of measuring the characteristics of the parent generation, and to the use of income rather than occupation as a measure of economic status. Multigenerational persistence is found to have been stronger early in the period, before the establishment of a modern welfare state, suggesting that institutions play a part in how economic characteristics are transmitted across generations.
Persistence is strong also in subpopulations where generations grew up in different parts of the country. This shows that the grandparental effect is not exclusively driven by direct interpersonal interaction between individuals across generations.
Discussant(s)
Mikael Lindahl
,
University of Gothenburg
Kelly Vosters
,
Michigan State University
Sevi Rodriguez Mora
,
University of Edinburgh
James Feigenbaum
,
Harvard University
JEL Classifications
  • J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers
  • N3 - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy