A Trajectories-Based Approach to Measuring Intergenerational Mobility

63 Pages Posted: 15 Mar 2023

See all articles by Yoosoon Chang

Yoosoon Chang

Indiana University Bloomington - Department of Economics

Steven Durlauf

University of Chicago; New Economic School (NES)

Seunghee Lee

Korea Development Institute (KDI)

Joon Park

Indiana University

Multiple version iconThere are 2 versions of this paper

Date Written: March 13, 2023


This paper develops an approach to intergenerational mobility in which the trajectories of parental incomes during childhood and adolescence are the conditioning objects for characterizing dependence across generations. We use functional regression methods to produce an intergenerational elasticity curve that measures how marginal changes in income at each age affect expected offspring permanent income. Using the PSID, estimates of this curve exhibit near monotonicity with respect to age, so that parental incomes in middle childhood and adolescence have larger marginal effects than incomes in early childhood. When interactions are allowed to occur between incomes at different ages, we find a complex pattern of substitutability between incomes at ages that are close in time versus complementarity between parental incomes for ages early childhood and adolescence. Qualitatively similar results hold for offspring education while we do not find evidence of age-specific effects for occupation. We conclude that important information about the links between parental incomes and children exists beyond the scalar characterization of parental permanent income.

JEL Classification: C13,J62

Suggested Citation

Chang, Yoosoon and Durlauf, Steven and Lee, Seunghee and Park, Joon, A Trajectories-Based Approach to Measuring Intergenerational Mobility (March 13, 2023). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2023-36, Available at SSRN: https://ssrn.com/abstract=4389826 or http://dx.doi.org/10.2139/ssrn.4389826

Yoosoon Chang

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States

Steven Durlauf (Contact Author)

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

New Economic School (NES)

100A Novaya Street
Moscow, Skolkovo 143026

Seunghee Lee

Korea Development Institute (KDI) ( email )

Joon Park

Indiana University ( email )

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