Working Papers in Economics, Department of Economics, University of Bergen
A comparison of intergenerational mobility curves in Germany, Norway, Sweden and the U.S.
(), Jonathan Davis
(), Bhashkar Mazumder
(), Martin Nybom
(), Daniel Schnitzlein
() and Kjell Vaage
Abstract: We use two non-parametric measures to characterize
intergenerational mobility (IGM) throughout the income distribution: Rank
Mobility and Income Share Mobility. We examine differences in these IGM
curves between Germany, Norway, Sweden and the United States using
comparable samples. Although we find that these curves are approximately
linear through most of the income distribution, non-linearities are
important in describing cross-country differences. The linear
representations of these curves lead to different conclusions regarding
cross-country differences depending on the measure. Using ranks, we find
that the U.S. is substantially less intergenerationally mobile than the
three European countries which have fairly similar degrees of rank
mobility. Despite the substantial heterogeneity in intergenerational rank
mobility within the U.S., we show that the most mobile region of the U.S.
is still less mobile than the least mobile regions of Norway and Sweden.
When we use a linear estimator of Income Share Mobility we find that the
four countries have very similar rates of IGM. However, there are some
notable cross-country differences at the bottom and the top of the income
distribution for both types of mobility. For example, the U.S. tends to
experience lower upward mobility at the very bottom of the income
distribution according to both measures. We conclude that researchers
should be careful in drawing conclusions regarding cross-country
differences in intergenerational mobility given that the results may be
sensitive to the concept being used and to non-linearities.
Keywords: rank mobility; income share mobility; cross-country differences; (follow links to similar papers)
JEL-Codes: I30; J62; (follow links to similar papers)
34 pages, April 15, 2015
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