Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2020:11: Trends in Absolute Income Mobility in North America and Europe

Robert Manduca (), Maximilian Hell (), Adrian Adermon (), Jo Blanden (), Espen Bratberg (), Anne C. Gielen (), Hans van Kipepersluis (), Keun Bok Lee (), Stephen Machin (), Martin D. Munk (), et al (4 additional author(s)) Martin Nybom (), Yuri Ostrovsky (), Sumaiya Rahman () and Outi Sirniö ()
Additional contact information
Robert Manduca: Department of Sociology, University of Michigan, Postal: Department of Sociology, University of Michigan
Maximilian Hell: Department of Sociology, Stanford University, Postal: Department of Sociology, Stanford University
Adrian Adermon: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: Institute for Evaluation of Labour Market and Education Policy, P O Box 513, SE-751 20 Uppsala, Sweden
Jo Blanden: Department of Economics, University of Surrey, Postal: Department of Economics, University of Surrey
Espen Bratberg: Department of Economics, University of Bergen, Postal: Department of Economics, University of Bergen
Anne C. Gielen: Erasmus School of Economics, Postal: The Netherlands
Hans van Kipepersluis: Erasmus School of Economics, Postal: Erasmus School of Economics, The Netherlands
Keun Bok Lee: California Center for Population Research,, Postal: University of California, Los Angeles
Stephen Machin: Department of Economics, London School of Economics, Postal: Department of Economics, London School of Economics
Martin D. Munk: The Free University, Copenhagen, Postal: The Free University, Copenhagen
Martin Nybom: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: Institute for Evaluation of Labour Market and Education Policy, P O Box 513, SE-751 20 Uppsala, Sweden
Yuri Ostrovsky: Statistics Canada, Postal: Statistics Canada
Sumaiya Rahman: Frontier Economics, Postal: Frontier Economics
Outi Sirniö: Department of Sociology, University of Turku, Postal: Department of Sociology, University of Turku

Abstract: We compute rates of absolute upward income mobility for the 1960-1987 birth cohorts in eight countries in North America and Europe. Rates and trends in absolute mobility varied dramatically across countries during this period: the US and Canada saw upward mobility rates near 50% for recent cohorts, while countries like Norway and Finland saw sustained rates above 70%. Decomposition analysis suggests that differences in the marginal income distributions, especially the amount of cross-cohort income inequality, were the primary driver of differing mobility rates across countries. We also demonstrate that absolute mobility rates can be accurately estimated without linked parent-child data.

Keywords: Intergenerational mobility; absolute mobility; inequality

JEL-codes: J62

87 pages, September 1, 2020

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