The Growing Importance of Family and Community: An Analysis of Changes in the Sibling Correlation in Earnings

41 Pages Posted: 2 Jan 2004

See all articles by Bhashkar Mazumder

Bhashkar Mazumder

Federal Reserve Bank of Chicago

David I. Levine

University of California, Berkeley - Economic Analysis & Policy Group

Date Written: November 2003

Abstract

This study presents evidence that the correlation in brothers' earnings has risen in recent decades. We use two distinct cohorts of young men from the National Longitudinal Surveys and estimate that the correlation in earnings between brothers rose from 0.26 to 0.45. This suggests that family and community influences shared by siblings have become increasingly important in determining economic outcomes. We find that neither the correlation in years of schooling nor the rising return to schooling accounts for this increase. We also argue that the PSID is not an appropriate dataset for analyzing changes over time because of its sampling design, small sample of siblings, and high attrition rate.

Suggested Citation

Mazumder, Bhashkar and Levine, David Ian, The Growing Importance of Family and Community: An Analysis of Changes in the Sibling Correlation in Earnings (November 2003). FRB of Chicago Working Paper No. 2003-24. Available at SSRN: https://ssrn.com/abstract=483023 or http://dx.doi.org/10.2139/ssrn.483023

Bhashkar Mazumder (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

David Ian Levine

University of California, Berkeley - Economic Analysis & Policy Group ( email )

Berkeley, CA 94720
United States
510-642-1697 (Phone)
510-643-1420 (Fax)

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