Intergenerational Earnings Mobility and the Inheritance of Employers

40 Pages Posted: 19 Apr 2010

See all articles by Miles Corak

Miles Corak

Statistics Canada; University of Ottawa; IZA Institute of Labor Economics

Patrizio Piraino

University of Cape Town - Faculty of Commerce - School of Economics

Abstract

Our analysis of intergenerational earnings mobility modifies the Becker-Tomes model to incorporate the intergenerational transmission of employers, which is predicted to increase the intergenerational elasticity of earnings. About 6% of young Canadian men have the same main employer as their fathers but this is positively related to paternal earnings and rises discretely at the top of the distribution. We use a switching regression model and identify two regimes associated with the inheritance of employers that have different intergenerational earnings elasticities. The model also demonstrates that the inheritance of employers plays a role in understanding observed nonlinearities.

Keywords: intergenerational mobility, job search, networks

JEL Classification: J62, J64, J24

Suggested Citation

Corak, Miles and Piraino, Patrizio, Intergenerational Earnings Mobility and the Inheritance of Employers. IZA Discussion Paper No. 4876. Available at SSRN: https://ssrn.com/abstract=1591703

Miles Corak (Contact Author)

Statistics Canada ( email )

Family and Labour Studies
Ottawa, Ontario K1A 0T6
Canada
613-951-9047 (Phone)
613-951-5403 (Fax)

University of Ottawa

2292 Edwin Crescent
Ottawa, Ontario K2C 1H7
Canada

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Patrizio Piraino

University of Cape Town - Faculty of Commerce - School of Economics ( email )

South Africa

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