Working Paper Series, Swedish Institute for Social Research, Stockholm University
Intergenerational top income mobility in Sweden: Capitalist dynasties in the land of equal opportunity?
(), Jesper Roine and Daniel Waldenström
Abstract: This paper presents new evidence on intergenerational
mobility in the top of the income and earnings distribution. Using a large
dataset of matched father-son pairs in Sweden, we find that
intergenerational transmission is very strong in the top, more so for
income than for earnings. In the extreme top (top 0.1 percent) income
transmission is remarkable with an IG elasticity above 0.9. We also study
potential transmission mechanisms and find that sons’ IQ, non-cognitive
skills and education are all unlikely channels in explaining this strong
transmission. Within the top percentile, increases in fathers’ income are,
if anything, negatively associated with these variables. Wealth, on the
other hand, has a significantly positive association. Our results suggest
that Sweden, known for having relatively high intergenerational mobility in
general, is a society where transmission remains strong in the very top of
the distribution and that wealth is the most likely channel.
Keywords: Intergenerational income mobility; top incomes; earnings inequality; income inequality; welfare state; quantile regression; (follow links to similar papers)
JEL-Codes: D31; J62; (follow links to similar papers)
30 pages, September 27, 2010
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