Local Intergenerational Mobility

41 Pages Posted: 17 Sep 2014 Last revised: 13 May 2020

See all articles by Andros Kourtellos

Andros Kourtellos

University of Cyprus - Department of Economics; University of Bologna - Rimini Center for Economic Analysis (RCEA)

Christa Marr

Fitchburg State University; Rollins College - Department of Economics

Chih Ming Tan

University of North Dakota - College of Business & Public Administration - Department of Economics

Date Written: April 23, 2020

Abstract

Using NLSY data we investigate whether the observed patterns of economic mobility (as measured by income and educational attainment) exhibit heterogeneity across socioeco- nomic groups and whether the nature of the heterogeneity can be explained by different levels of persistence in the intergenerational transmission of cognitive and non-cognitive abilities across these groups. In doing so we employ the varying coefficient model (VCM) to estimate nonparametric (local) measures of intergenerational mobility of those outcome variables. By local we mean that the persistence coefficients are modeled as smooth func- tions of log parental permanent income. Our findings show that intergenerational mobility exhibits nonlinear patterns. Individuals with different parental income are characterized by different degrees of intergenerational mobility. Moreover, we find evidence that sug- gests cognitive abilities play a role in explaining intergenerational mobility. These findings provide some support for a new class of family investment models that emphasize the role of such abilities in economic mobility.

Keywords: intergenerational income mobility, varying coefficient models, non-cognitive skills, cognitive skills

JEL Classification: C14, I14, I24

Suggested Citation

Kourtellos, Andros and Marr, Christa and Tan, Chih Ming, Local Intergenerational Mobility (April 23, 2020). European Economic Review 126 (2020) 103460, Available at SSRN: https://ssrn.com/abstract=2496826 or http://dx.doi.org/10.2139/ssrn.2496826

Andros Kourtellos (Contact Author)

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

University of Bologna - Rimini Center for Economic Analysis (RCEA) ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

Christa Marr

Fitchburg State University ( email )

160 Pearl St
Fitchburg, MA 01420
United States

Rollins College - Department of Economics ( email )

1000 Holt Ave
Winter Park, FL 32789
United States

HOME PAGE: http://christamarr.com

Chih Ming Tan

University of North Dakota - College of Business & Public Administration - Department of Economics ( email )

293 Centennial Drive Stop 8369
Grand Forks, ND 58202-8369
United States

HOME PAGE: http://sites.google.com/site/chihmingtan/home

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