Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
IFAU - Institute for Evaluation of Labour Market and Education Policy Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2015:13:
Biases in standard measures of intergenerational income dependence

Martin Nybom () and Jan Stuhler ()

Abstract: Estimates of the most common mobility measure, the intergenerational elasticity, can be severely biased if snapshots are used to approximate lifetime income. However, little is known about biases in other popular dependence measures. We use long Swedish income series to provide such evidence for linear and rank correlations, and rank-based transition probabilities. Attenuation bias is considerably weaker in rank-based measures. Life-cycle bias is strongest in the elasticity; moderate in the linear correlation; and small in rank-based measures. However, with important exceptions: persistence in the tails of the distribution is considerably higher, and long-distance downward mobility considerably lower, than estimates from short-run income suggest.

Keywords: Intergenerational mobility; correlation; measurement error; (follow links to similar papers)

JEL-Codes: J62; (follow links to similar papers)

25 pages, June 15, 2015

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

wp2015-13-Biases-in-stand ... nal-income-dependence.pdf    PDF-file
Download Statistics
This paper is published as:
Nybom, Martin and Jan Stuhler, (2017), 'Biases in standard measures of intergenerational income dependence', The Journal of Human Resources, Vol. 52, July, No. 3, pages 800-825

Questions (including download problems) about the papers in this series should be directed to Monica Fällgren ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:ifauwp:2015_013 This page was generated on 2017-09-06 14:06:38