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Assessing Changes in Intergenerational Earnings Mobility

35 Pages Posted: 24 Jul 2003  

Espen Bratberg

University of Bergen - Department of Economics

Øivind Anti Nilsen

Norwegian School of Economics (NHH) - Department of Economics; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Kjell Vaage

University of Bergen - Department of Economics

Date Written: June 2003

Abstract

Previous research on changes in intergenerational mobility suggests that mobility is decreasing over time. One explanation for this pattern is increased cross-sectional income inequality. In contrast to most other OECD countries, income inequality in Norway has been remarkably stable through large parts of the 1980s and the 1990s, not least due to a compression of the earnings distribution during the same period. Using longitudinal data for Norwegian children born in 1950, 1955, 1960, and 1965, we find a relatively high degree of earnings mobility. Furthermore, there is no tendency to increasing inequality along this dimension. This finding supports the hypothesis that intergenerational mobility is positively correlated with a compressed income distribution. Quartile father-child earnings transition matrices, together with non-parametric regressions, indicate quite high mobility in the middle of the distribution and somewhat more persistence at the top and bottom. This approach also reveals increased mobility over time for sons, but a less clear picture for daughters.

Keywords: Intergenerational Mobility, Intertemporal Change

JEL Classification: J62, C23

Suggested Citation

Bratberg, Espen and Nilsen, Øivind Anti and Vaage, Kjell, Assessing Changes in Intergenerational Earnings Mobility (June 2003). IZA Discussion Paper No. 797. Available at SSRN: https://ssrn.com/abstract=418646

Espen Bratberg

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen
Norway

Oivind Anti Nilsen (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5045 Bergen
Norway

IZA Institute of Labor Economics

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

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Kjell Vaage

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen
Norway
+47 5 558 9206 (Phone)
+47 5 558 9210 (Fax)

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