Determinants of Intergenerational Mobility
Paper Session
Saturday, Jan. 4, 2025 10:15 AM - 12:15 PM (PST)
- Chair: Christopher Walters, University of California-Berkeley
Housing Prices, Internal Migration, and Intergenerational Mobility
Abstract
This paper examines the role of housing affordability in shaping intergenerational mobility by affecting internal migration in China. It further explores how housing policies might address the challenges that rising housing costs pose for social mobility. To address the endogeneity of housing prices, I employ an instrumental variables approach, exploiting the Housing Purchase Restriction policy as a natural experiment. This policy limited the number of properties households could purchase in selected prefectures, thereby creating quasi-exogenous variation in housing price growth. I find that higher destination housing costs deter migration, with a more pronounced effect on individuals from disadvantaged families. As a result, these individuals earn lower incomes than their counterparts from more affluent backgrounds. Therefore, higher housing costs reduce intergenerational mobility. Furthermore, to evaluate the effects of various housing policies, I adopt a structural approach to complement the reduced-form results. Unlike the aggregate-level reduced-form analysis, the structural approach reveals that the impact varies across different destinations. Rent subsidies in megacities primarily increase migration among advantaged individuals than disadvantaged ones, thereby exacerbating income disparities. Conversely, policies targeting disadvantaged groups or offering non-targeted subsidies in non-megacities help increase migration for disadvantaged people and raise intergenerational mobility.How, When, and Where Does the Opportunity Gap in the Netherlands Open Up?
Abstract
We use administrative data on a wide range of outcomes, measured between birth and the age of 35, of 4.6 million children and their parents, to document three sets of results on intergenerational mobility in the Netherlands. First, we show that the opportunity gap in the Netherlands opens up at a very young age, and in various areas of human functioning: labor market outcomes, social insurance benefits, health, education, housing, and fertility are strongly associated with parent income, wealth, and educational attainment. These differences persist from birth through adulthood. At the top (90th percentile) of the parent income distribution, children are on average 42.2% less likely to be small for gestational age at birth, 396.1% more likely to obtain a high primary school test score, 350.9% more likely to attend university, 74.9% less likely to experience young motherhood, and 64.9% less likely to claim disability benefits at the age of 35, and compared with children at the bottom (10th percentile) of the parent income distribution. On average, a 10 percentile increase in parent income is associated with a 2.8 percentile increase in a child's income. This means that the Netherlands has the lowest relative intergenerational income mobility of all OECD countries except the U.S. Second, we document substantial spatial variation in the degree of absolute income mobility, measured as the mean income rank of 35-year-old children of parents at the 25th percentile of the parental income distribution. Third, we show strong correlations between absolute income mobility and municipal characteristics such as neighborhood and primary school classroom composition. The gender wage and education gaps are largest in municipalities with large shares of Calvinist Protestant residents. We make our results publicly available as data sets and through two interactive websites, opportunitygap.nl and opportunitymap.nl.The Dynastic Benefits of Neighborhood Sorting
Abstract
Using rich longitudinal data from Denmark, this paper exploits numerous quasi-experimental strategies to estimate the benefits of neighborhood sorting, as channeled through schools with better peers and teachers. We find that attending better schools significantly impacts later life outcomes of children, including increasing college graduation and wages while reducing participation in crime and teenage pregnancy. Linking these effects with the cost of sorting to neighborhoods with better schools, we estimate a private internal rate of return in the range 4%–15%.Discussant(s)
David Cesarini
,
New York University
Hadar Avivi
,
Princeton University
Eric Chyn
,
University of Texas-Austin
Rick Mansfield
,
University of Colorado-Boulder
JEL Classifications
- J0 - General