Family, Community and Long-Term Earnings Inequality

60 Pages Posted: 8 Aug 2016

See all articles by Paul Bingley

Paul Bingley

Aarhus University - National Centre for Register-Based Research

Lorenzo Cappellari

Catholic University of the Sacred Heart of Milan; University of Essex - Institute for Social and Economic Research (ISER); Institute for the Study of Labor (IZA)

Konstantinos Tatsiramos

University of Luxembourg; Luxembourg Institute of Socio-Economic Research (LISER)

Abstract

This paper studies the influence of family, schools and neighborhoods on life-cycle earnings inequality. We develop an earnings dynamics model linking brothers, schoolmates and teenage parish neighbors using population register data for Denmark. We exploit differences in the timing of family mobility and the partial overlap of schools and neighborhoods to separately identify sorting from community and family effects. We find that family is far more important than community in influencing earnings inequality over the life cycle. Neighborhoods and schools influence earnings only early in the working life and this influence falls rapidly and becomes negligible after age 30.

Keywords: sibling correlations, neighborhoods, schools, life-cycle earnings, inequality

JEL Classification: D31, J62

Suggested Citation

Bingley, Paul and Cappellari, Lorenzo and Tatsiramos, Konstantinos, Family, Community and Long-Term Earnings Inequality. IZA Discussion Paper No. 10089, Available at SSRN: https://ssrn.com/abstract=2819370

Paul Bingley (Contact Author)

Aarhus University - National Centre for Register-Based Research ( email )

8000 Århus C, 8210
Denmark

Lorenzo Cappellari

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

University of Essex - Institute for Social and Economic Research (ISER)

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Institute for the Study of Labor (IZA)

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

Konstantinos Tatsiramos

University of Luxembourg ( email )

L-1511 Luxembourg
Luxembourg

Luxembourg Institute of Socio-Economic Research (LISER) ( email )

11, Porte des Sciences
Campus Belval – Maison des Sciences Humaines
Esch-sur-Alzette, L-4366
Luxembourg

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