Papers Containing Keywords(s): 'intergenerational'
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Viewing papers 31 through 35 of 35
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Working PaperBlack-White Differences in Intergenerational Economic Mobility in the U.S.
December 2011
Working Paper Number:
CES-11-40
Traditional measures of intergenerational mobility such as the intergenerational elasticity are not useful for inferences concerning group differences in mobility with respect to the pooled income distribution. This paper uses transition probabilities and measures of 'directional rank mobility' that can identify inter-racial differences in intergenerational mobility. The study uses two data sources including one that contains social security earnings for a large intergenerational sample. I find that recent cohorts of blacks are not only significantly less upwardly mobile but also significantly more downwardly mobile than whites. This implies a steady-state distribution in which there is no racial convergence in income. A descriptive analysis using covariates reveals that test scores in adolescence can explain much of the racial difference in both upward and downward mobility. Family structure can account for some of the racial gap in upward mobility but not downward mobility. Completed schooling and parental wealth also appear to account for some of the racial gaps in intergenerational mobility.View Full Paper PDF
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Working PaperParental Earnings and Children's Well-Being and Future Success: An Analysis of the SIPP Matched to SSA Earnings Data
April 2011
Working Paper Number:
CES-11-12
We estimate the association between parental earnings and a wide variety of indicators of child well-being using data from the Survey of Income and Program Participation (SIPP) matched to administrative earnings records from the Social Security Administration. We find that the use of longer time averages of parent earnings leads to substantially higher estimated effects compared to using only a single year of parent earnings. This suggests that previous studies may have understated the potential efficacy of income support programs to improve child well-being. Further, policy makers should take into account the attenuation bias when comparing studies that use different time spans to measure parental income. Using 7 year time averages of parent earnings, we show for example, that a doubling of parent earnings reduces the probability of a teenager reporting being in poor health by close to 50 percent and a child having insufficient food by 75 percent.View Full Paper PDF
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Working PaperFamilies, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey
June 2005
Working Paper Number:
CES-05-07
An important finding in the rapidly growing literature on self-employment is that the probability of self-employment is substantially higher among the children of business owners than among the children of non-business owners. Using data from the confidential and restricted-access Characteristics of Business Owners (CBO) Survey, we provide some suggestive evidence on the causes of intergenerational links in business ownership and the related issue of how having a family business background affects small business outcomes. Estimates from the CBO indicate that more than half of all business owners had a self-employed family member prior to starting their business. Conditional on having a self-employed family member, less than 50 percent of small business owners worked in that family member's business suggesting that it is unlikely that intergenerational links in self-employment are solely due to the acquisition of general and specific business capital and that instead similarities across family members in entrepreneurial preferences may explain part of the relationship. In contrast, estimates from regression models conditioning on business ownership indicate that having a self-employed family member plays only a minor role in determining small business outcomes, whereas the business human capital acquired from prior work experience in a family member's business appears to be very important for business success. Estimates from the CBO also indicate that only 1.6 percent of all small businesses are inherited suggesting that the role of business inheritances in determining intergenerational links in self-employment is limited at best.View Full Paper PDF
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Working PaperThe Mis-Measurement of Permanent Earnings: New Evidence from Social Security Earnings Data
May 2002
Working Paper Number:
CES-02-12
This study investigates the reliability of using short-term averages of earnings as a proxy for permanent earnings in empirical research. An earnings dynamics model is estimated on a large sample of men covering the period from 1983 to 1997 following the cohort-based methodology of Baker and Solon (1999). The analysis uses a unique dataset that matches men in the 1984, 1990 and 1996 Surveys of Income and Program Participation (SIPP) to the Social Security Administration's Summary Earnings Records (SER). The results confirm that using a short-term average of earnings can lead to spurious estimates of the effect of lifetime earnings on a particular outcome. In addition, the transitory variance appears to vary considerably over the lifecycle. The share of earnings variance due to transitory factors is higher among blacks and the persistence of transitory shocks appears to be greater for this group as well. Finally, the transitory variance appears to be a more important factor in explaining the overall earnings variance of college educated men than those without college.View Full Paper PDF
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Working PaperEarnings Mobility in the US: A New Look at Intergenerational Inequality
May 2002
Working Paper Number:
CES-02-11
This study uses a new data set that contains the Social Security earnings histories of parents and children in the 1984 Survey of Income and Program Participation, to measure the intergenerational elasticity in earnings in the United States. Earlier studies that found an intergenerational elasticity of 0.4 have typically used only up to five-year averages of fathers' earnings to measure fathers' permanent earnings. However, dynamic earnings models that allow for serial correlation in transitory shocks to earnings imply that using such a short time span may lead to estimates that are biased down by nearly 30 percent. Indeed, by using many more years of fathers' earnings than earlier studies, the intergenerational elasticity between fathers and sons is estimated to be around 0.6 implying significantly less mobility in the U.S. than previous research indicated. The elasticity in earnings between fathers and daughters is of a similar magnitude. The evidence also suggests that family income has an even larger effect than fathers' earnings on children's future labor market success. The elasticity of earnings is higher for families with low net worth, offering some empirical support for theoretical models that predict differences due to borrowing constraints. Some evidence of a higher elasticity among blacks is found but the results are not conclusive.View Full Paper PDF
