When Measure Matters: Coresident Sample Selection Bias in Estimating Intergenerational Mobility in Developing Countries

52 Pages Posted: 4 Aug 2015

See all articles by M. Shahe Emran

M. Shahe Emran

George Washington University - Department of Economics

William H. Greene

New York University Stern School of Business

Forhad Shilpi

World Bank - Development Research Group (DECRG)

Date Written: July 30, 2015

Abstract

Potential biases from coresident sample selection have been a major stumbling block for research on intergenerational mobility in developing countries. We use two rich data sets from Bangladesh and India to provide evidence on the extent of coresidency bias in standard measures of intergenerational mobility: intergenerational regression coefficient (IGRC) and intergenerational correlation (IGC). Estimates for parents-children, father-son, and mother-daughter persistence in schooling show that the IGRC estimates are severely biased downward (average 30 percent). In contrast, the bias in IGC estimates is much lower (average less than 10 percent, in many cases less than 5 percent). Truncation due to coresidency criterion in a survey biases the IGRC estimate downward, but it also biases upward the estimate of the ratio of the standard deviations of parental to children's schooling. The IGC estimate suffers from lower bias because the upward bias in the estimate of the ratio of standard deviations partly cancels out the downward bias in the IGRC estimate. The evidence suggests that the available household surveys in developing countries can be fruitfully used to understand intergenerational mobility if one focuses on IGC. The findings have important implications for cross-country comparison of intergenerational economic mobility.

Keywords: Coresidency, Sample Selection Bias, Intergenerational Mobility, Intergenerational Regression Coefficient (IGRC), Intergenerational Correlation (IGC), Bangladesh, India

JEL Classification: O12, J62

Suggested Citation

Emran, M. Shahe and Greene, William H. and Shilpi, Forhad, When Measure Matters: Coresident Sample Selection Bias in Estimating Intergenerational Mobility in Developing Countries (July 30, 2015). Available at SSRN: https://ssrn.com/abstract=2639343 or http://dx.doi.org/10.2139/ssrn.2639343

M. Shahe Emran (Contact Author)

George Washington University - Department of Economics ( email )

2115 G Street NW
302 Monroe Hall
Washington, DC 20052
United States

William H. Greene

New York University Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States
212-998-0876 (Phone)

HOME PAGE: http://people.stern.nyu.edu/wgreene

Forhad Shilpi

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-7476 (Phone)
202-522-1151 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
41
Abstract Views
492
PlumX Metrics