Scandinavian Working Papers in Economics
Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy
No 2026:21: Labor-market drivers of intergenerational earnings persistence
Erika Forsberg (), Martin Nybom () and Jan Stuhler ()
Additional contact information
Erika Forsberg: 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
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
Jan Stuhler: Universidad Carlos III de Madrid
Abstract: How does worker-firm sorting contribute to intergenerational persistence? Firm pay premia account for 36% of the intergenerational earnings elasticity in Sweden, rising to 50% with dynamic returns to firm-specific experience. Large pay gaps already open atlabor market entry, as children from privileged backgrounds find more favorable entry points; they then climb the firm pay ladder faster, switching firms more often and gaining more per switch. Skill sorting explains this widening but not the initial gaps, consistent with networks and employer learning. Privileged children’s firms are also more desirable overall, a gap that keeps widening after pay gaps stabilize.
Keywords: Intergenerational mobility; firm pay; worker sorting
Language: English
84 pages, October 2, 2026
Full text files
wp-2026-21-labor-mar...ings-persistence.pdfFull text
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