The Effect of Family Background on Economic Status: a Longitudinal Analysis of Sibling Correlations
28 Pages Posted: 19 Jul 2004 Last revised: 28 Sep 2010
Date Written: June 1987
Numerous previous studies have used sibling correlations to measure the importance of family background as a determinant of economic status. These studies. however. have been biased by several flaws: failure to separate permanent from transitory status variation (including that from measurement error). failure to account for life-cycle stage. and overly homogeneous samples. This paper presents a methodology to address these problems and applies it to longitudinal data from the Panel Study of Income Dynamics. Our main conclusion is that family background appears to exert greater influence on economic status than has been indicated by earlier research.
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