"And Yet it Moves": Intergenerational Mobility in Italy

84 Pages Posted: 8 Apr 2019 Last revised: 14 Apr 2019

See all articles by Paolo Acciari

Paolo Acciari

Ministry of Economy and Finance, Italy

Alberto Polo

New York University (NYU) - Department of Economics

Giovanni Violante

Princeton University

Date Written: April 2019

Abstract

We link administrative data on tax returns across two generations of Italians to study the degree of intergenerational mobility. We estimate that a child with parental income below the median is expected to belong to the 44th percentile of its own income distribution as an adult, and the probability of moving from the bottom to the top quintile of the income distribution within a generation is 0.10. The rank-rank correlation is 0.25, and rank persistence at the top is significantly higher than elsewhere in the income distribution. Upward mobility is higher for sons, first-born children, children of self-employed parents, and for those who migrate once adults. The data reveal large variation in child outcomes conditional on parental income rank. Part of this variation is explained by the location where the child grew up. Provinces in Northern Italy, the richest area of the country, display upward mobility levels 3-4 times as large as those in the South. This regional variation is strongly correlated with local labor market conditions, indicators of family instability, and school quality.

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Suggested Citation

Acciari, Paolo and Polo, Alberto and Violante, Giovanni, "And Yet it Moves": Intergenerational Mobility in Italy (April 2019). NBER Working Paper No. w25732. Available at SSRN: https://ssrn.com/abstract=3368022

Paolo Acciari (Contact Author)

Ministry of Economy and Finance, Italy ( email )

Via XX Settembre 97
Rome, Rome 00187
Italy

Alberto Polo

New York University (NYU) - Department of Economics ( email )

19 West 4th Street
New York, NY 10012
United States

Giovanni Violante

Princeton University

22 Chambers Street
Princeton, NJ 08544-0708
United States

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