Correlations of Brothers' Earnings and Intergenerational Transmission

47 Pages Posted: 22 May 2017

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)

Abstract

Correlations between parent and child earnings reflect intergenerational mobility and, more broadly, correlations between siblings' earnings reflect shared community and family background. These earnings relationships capture important aspects of relations in socioeconomic status more generally. We estimate intergenerational transmission and sibling correlations of life-cycle earnings jointly within a unified framework that nests previous models. Using data on the Danish population of father/first-son/second-son triads we find that intergenerational effects account for on average 72 percent of sibling correlations. This share is higher than all previous studies because we allow for heterogeneous intergenerational transmission between families. Sibling correlations exhibit a U-shape over the working life, consistent with differences in human capital investments between families.

Keywords: sibling correlations, intergenerational transmission, life-cycle earnings

JEL Classification: D31, J62

Suggested Citation

Bingley, Paul and Cappellari, Lorenzo, Correlations of Brothers' Earnings and Intergenerational Transmission. IZA Discussion Paper No. 10761, Available at SSRN: https://ssrn.com/abstract=2971377

Paul Bingley (Contact Author)

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

8000 Ã…rhus 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

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