Measurement and cross country differences

Unformatted text preview: Fortin – Econ 560 V. Social Mobility 2. Measurement of Intergenerational Mobility and Comparative Evidence 1. Early Studies 2. Use of Administrative Data 3. Strategies to Identify Causal Effects a. Adoptive Children b. Exogenous Variation 4. Cross-Country and Within-Country Studies Lecture 5B Fortin – Econ 560 Lecture 5B 1. Early Studies The deceptively simple equation of the intergenerational transmission of income, ˆ y1 y 0 , (1) where y0 denotes the long-run income of the father and y1 the long run income of the son, hides many estimation pitfalls. Many early studies had not recognized the potential problems and some were still exploring the choice of functional forms, which quickly converge to the log-linear form. ˆ With the log-linear form, represents the intergenerational income elasticity (IGE). For fathers, a key challenge is to derive an accurate measure of long-run earnings. Because of both response error and genuine transitory fluctuations in earnings 0t , single-year measures y 0 t are error-ridden proxies for longer-run earnings: y0t y 0 0t (2) Source: Becker and Tomes (1986) T able 1 Regressions of Son's Income or Earnings o n Father's Income or Earnings in Linear, Semilog, and Log-linear Form Variables Location and Son's Year 1966 (older white) 1969 (young black) 1966 (older black) Y ork, England: 1975-78 1975-78 Malmo, Sweden, 1963 Geneva, Switzerland, 1980 Sarpsborg, Norway, 1960 D ependent I ndependent O ther 1957-60 1974 United States, 1981-82 United States: 1969 (young white) Father's Year E IP None 2069 Coefficient t RZ N E A uthor 1957-60 1957-60 Log E Log E IP L og I P None None N.A. 2493 Hauser, Sewell, and Lutterman (1975) Hauser (in press)? Tsai (1983)t 1981-82 L og E § L og E § N one 722 Behrman and Taubman (1983) L og I 3 II 1607 Freeman (1981) Log H L og I3 I1 2131 Freeman (1981) Log H Log I 3 I1 634 Freeman (1981) Log H Log I 3 I 1 947 Freeman (1981) 1950 1950 Log H Log W Log W L og W N one N one 198 307 Atkinson (1981) Atkinson (1981) 1938 Log I ICD None 545 545 545 de \X'olff and van Slijpe (1973) IHH None 801 Girod (1984) 115 Soltow (1965) Log H \!'hen son was 14 When son was 14 When son was 14 When son was 14 IHH 1950 L...
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