American exceptionalism in a new light : a comparison of intergenerational earnings mobility in the Nordic countries, the United Kingdom and the United States (original) (raw)

Nonlinearities in Intergenerational Earnings Mobility: Consequences for Cross-Country Comparisons

The Economic Journal, 2007

We show that the patterns of intergenerational earnings mobility in Denmark, Finland and Norway, unlike those for the US and the UK, are highly nonlinear. The Nordic relationship between log earnings of sons and fathers is flat in the lower segments of the fathersÕ earnings distribution -sons growing up in the poorest households have the same adult earnings prospects as sons in moderately poor households -and is increasingly positive in middle and upper segments. This convex pattern contrasts sharply with our findings for the US and the UK, where the relationship is much closer to being linear. As a result, cross-country comparisons of intergenerational earnings elasticities may be misleading with respect to transmission mechanisms in the central parts of the earnings distribution and uninformative in the tails of the distribution.

Assessing changes in intergenerational earnings mobility

Previous research on changes in intergenerational mobility suggests that the mobility is decreasing over time. One explanation for this pattern is increased cross-sectional income inequality. In contrast to most other OECD countries, the income inequality in Norway has been remarkably stable through large parts of the 1980s and the 1990s, not the least due to a compression of the earnings distribution during the same period. Using longitudinal data for Norwegian children born 1950, -55, -60, and -65, we find a relatively high degree of earnings mobility. Furthermore, there is no tendency to increasing inequality along this dimension. This finding supports the hypothesis that intergenerational mobility is positively correlated with a compressed income distribution. Quartile father-child earnings transition matrices, together with nonparametric regressions, indicate quite high mobility in the middle of the distribution and somewhat more persistence at the top and bottom. This approach also reveals increased mobility over time for sons, but a less clear picture for daughters.

Trends in Intergenerational Mobility across Offspring's Earnings Distribution in Norway

Industrial Relations, 2007

Using register data for Norwegian cohorts born in 1950Norwegian cohorts born in , 1955Norwegian cohorts born in , and 1960 found intergenerational earnings mobility to be high, and lower at the lower end of offspring's earnings distribution than at the upper end. The findings also indicate that mobility has increased over time and that the increase is somewhat higher for lower earnings. The increase in earnings mobility over time is larger for women than for men. * The authors' affiliations are, respectively,

Intergenerational Earnings Mobility Revisited: Estimates Based on Lifetime Earnings*

The Scandinavian Journal of Economics, 2012

Using Norwegian intergenerational data, which include a substantial part of the life-cycle earnings for children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility. Extending the length of fathers' earnings window from 5 to 25 years increases estimated elasticities. Increasing the age at which fathers' earnings are observed has the opposite effect. Biases in the estimated elasticities are related to both transitory earnings variation and life-cycle measurement error; the former appear to be more important than the latter. Estimation bias stemming from persistence in transitory innovations plays only a minor role. Our findings indicate that intergenerational earnings mobility in Norway might have been strongly overstated in many earlier studies with shorter earnings histories. Some of our new estimates are twice as large as earlier estimates.

Intergenerational Earnings Mobility in Norway: Levels and Trends*

Scandinavian Journal of Economics, 2005

Using longitudinal data for Norwegian children born in 1950Norwegian children born in , 1955Norwegian children born in , 1960Norwegian children born in and 1965, we find a relatively high degree of earnings mobility. There is no tendency toward decreasing mobility over the cohorts. Conditioning on the position in the earnings distribution, the analysis indicates quite high mobility in the middle of the distribution and somewhat more persistence at the top and bottom. This approach also reveals increased mobility over time for sons, but a less clear picture for daughters.

A comparison of Danish and international findings on integenerational earnings mobility

Unpublished manuscript, Danish National …, 2005

Intergenerational earnings mobility is an important issue, because the higher the mobility, the more opportunities are available to citizens and the easier it becomes to allocate economic resources in the most efficient way. The article provides a summary of studies of earnings mobility and makes a comparison with analyses on a Danish register data set. The earnings mobility between fathers/mothers and their sons/daughters is investigated, and shows that the father-son earnings persistence effect is found to be smaller in Denmark, Finland and Sweden than in the United States, but higher than in Norway.

Intergenerational Mobility: Trends Across the Earnings Distribution

The analysis, based on register data for Norwegian cohorts born 1950, 1955, and 1960, shows that the intergenerational earnings mobility is high. Using quantile regression, mobility is found to be lower at the lower end of the earnings distribution than at the upper end. The findings also indicate that mobility increases over time and that the increase seems to be somewhat higher for lower earnings. Finally, we find that the increase in earnings mobility over time has been larger for women than for men.