Direct Measures of Intergenerational Income Mobility for Australia

37 Pages Posted: 25 Sep 2017

See all articles by Chelsea Murray

Chelsea Murray

University of Wollongong

Robert Clark

Australian National University (ANU)

Silvia Mendolia

University of Aberdeen

Peter Siminski

University of Wollongong - School of Economics

Abstract

We present the first Australian estimates of intergenerational mobility that draw on direct observations of income from two generations. Using panel data for three birth cohorts of young adults from the Household, Income and Labour Dynamics Australia survey, the estimated intergenerational income elasticity is 0.28. Correcting for attenuation bias raises this to 0.41. We estimate the rank correlation to be 0.27. We show that Australia has greater mobility than the US and this is not sensitive to methodological choices. We also show that spousal selection and family structure may be important determinants of income persistence across generations.

Keywords: intergenerational mobility, Australia, HILDA

JEL Classification: J62

Suggested Citation

Murray, Chelsea and Clark, Robert and Mendolia, Silvia and Siminski, Peter, Direct Measures of Intergenerational Income Mobility for Australia. IZA Discussion Paper No. 11020, Available at SSRN: https://ssrn.com/abstract=3041815 or http://dx.doi.org/10.2139/ssrn.3041815

Chelsea Murray (Contact Author)

University of Wollongong

Northfields Avenue
Wollongong, 2522
Australia

Robert Clark

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Silvia Mendolia

University of Aberdeen ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom
0044 1224 272182 (Phone)

Peter Siminski

University of Wollongong - School of Economics ( email )

Northfields Avenue
Wollongong, New South Wales 2522
Australia

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