How Important is the Family? Evidence from Sibling Correlations in Permanent Earnings in the US, Germany and Denmark

35 Pages Posted: 24 Mar 2011

See all articles by Daniel Schnitzlein

Daniel Schnitzlein

German Institute for Economic Research (DIW Berlin); University of Hamburg

Date Written: March 7, 2011

Abstract

This paper is the first to analyze intergenerational economic mobility based on sibling correlations in permanent earnings in Germany and to provide a cross-country comparison of Germany, Denmark, and the US. The main findings are as follows: the importance of family and community background in Germany is higher than in Denmark and comparable to that in the US. This holds true for brothers and sisters. In Denmark 20 percent of the inequality in permanent earnings can be attributed to family and community factors shared by brothers while the corresponding estimates are 43 percent in Germany and 45 percent in the US. For sisters the estimates are 19 percent for Denmark, 39 percent for Germany and 29 percent for the US. This ranking is shown to be robust against alternative approaches.

Keywords: Sibling correlations, Intergenerational mobility, Inequality, REML

JEL Classification: J62

Suggested Citation

Schnitzlein, Daniel, How Important is the Family? Evidence from Sibling Correlations in Permanent Earnings in the US, Germany and Denmark (March 7, 2011). SOEPpaper No. 365, Available at SSRN: https://ssrn.com/abstract=1792606

Daniel Schnitzlein (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

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