Accounting for Changes in Intergenerational Mobility

Handy, Christopher and Shester, Katharine (2020): Accounting for Changes in Intergenerational Mobility.

Abstract

We use data from Opportunity Insights to study changes in intergenerational mobility over time in the U.S. Previous research has found no change in mobility at the national level, but we show that this hides substantial increases and decreases in mobility at the local level. These changes appear to be persistent, not simply noise. We use an R^2 decomposition to account for the changes in mobility. Changes in labor market conditions and house prices can explain two thirds of the changes in income mobility. Our results suggest caution in treating mobility as a fixed characteristic of a place.

• Item Type: MPRA Paper
• Language: English
• Keywords: intergenerational mobility, college attendance, labor market entry conditions
• Subjects: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J62 - Job, Occupational, and Intergenerational Mobility; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics

References

Aaronson, Daniel, and Bhashkar Mazumder. 2008. “Intergenerational Economic Mobility in the United States, 1940 to 2000.” Journal of Human Resources, 43(1), 139–172.

Biasi, Barbara. 2019. “School Finance Equalization Increases Intergenerational Mobility: Evidence from a Simulated-Instruments Approach.” NBER Working Paper 25600.

Chetty, Raj, et al. 2014a. “Where is the land of opportunity? The geography of intergenerational mobility in the United States.” Quarterly Journal of Economics, 129(4), 1553–1623.

Chetty, Raj, et al. 2014b. “Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility.” American Economic Review: Papers & Proceedings, 104(5), 141–147.

Chetty, Raj, et al. 2017. “The fading American dream: Trends in absolute income mobility since 1940.” Science, 356(6336), 398–406.

Chetty, Raj, and Nathaniel Hendren. 2018a. “The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects.” Quarterly Journal of Economics, 133(3), 1107–1162.

Chetty, Raj, and Nathaniel Hendren. 2018b. “The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates.” Quarterly Journal of Economics, 133(3), 1163–1228.

County Business Patterns (CBP), 1986–2014. (www.census.gov/programs-surveys/cbp/data/datasets.html), US Census Bureau, released 1988–2016.

Derenoncourt, Ellora. 2019. “Can you move to opportunity? Evidence from the Great Migration.” Working paper.

Farooqui, Anusar. 2016. “A Natural Decomposition of in Multiple Linear Regression.” Working paper.

Fletcher, Jason, and Joel Han. 2018. “Intergenerational Mobility in Education: Variation in Geography and Time.” NBER Working Paper 25324.

Gallagher, Ryan, Robert Kaestner, and Joseph Persky. 2019. “The geography of family differences and intergenerational mobility.” Journal of Economic Geography, 19, 589–618.

Grawe, Nathan D. 2006. 2006. “Lifecycle bias in estimates of intergenerational earnings persistence.” Labour Economics, 13(5), 551–570.

Haider, Steven, and Gary Solon. 2006. “Life-Cycle Variation in the Association between Current and Lifetime Earnings.” American Economic Review, 96(4), 1308–1320.

Hilger, Nathaniel G. 2017. “The Great Escape: Intergenerational Mobility in the United States, 1930-2010.” Working paper.

House Price Index. (www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index-Datasets.aspx), Federal Housing Finance Agency.

Lee, Chul-In, and Gary Solon. 2009. “Trends in Intergenerational Income Mobility.” Review of Economics and Statistics 91(4): 766–772.

Lefgren, Lars J., Jaren C. Pope, and David P. Sims. 2020. “Contemporary State Policies and Intergenerational Income Mobility.” Journal of Human Resources, forthcoming.

Mian, Atif, and Amir Sufi. 2014. “What explains the 2007–2009 drop in employment?” Econometrica, 82(6), 2197–2223.

National Center for Health Statistics (NCHS) Data File Documentations, Natality, 1968–1980 (machine readable data file and documentation, CD-ROM Series), National Center for Health Statistics, Hyattsville, Maryland.

Robertson, Cassandra, and Rourke O’Brien. 2018. “Health Endowment at Birth and Variation in Intergenerational Economic Mobility: Evidence From U.S. County Birth Cohorts.” Demography, 55, 249–269.

Rothstein, Jesse. 2019. “Inequality of Educational Opportunity? Schools as Mediators of the Intergenerational Transmission of Income.” Journal of Labor Economics, 37(S1), S85–S123.

Sharkey, Patrick, and Gerard Torrats-Espinosa. 2017. “The effect of violent crime on economic mobility.” Journal of Urban Economics, 102, 22–33.

Solon, Gary. 1992. “Intergenerational Income Mobility in the United States.” American Economic Review, 82(3), 393–408.

Surveillance, Epidemiology, and End Results (SEER) Program Populations (1969–2015) (www.seer.cancer.gov/popdata), National Cancer Institute, DCCPS, Surveillance Research Program, released December 2016.

Tan, Hui Ren. 2019. “A Different Land of Opportunity: The Geography of Intergenerational Mobility in the Early 20th-Century US.” Working paper.

Wooldridge, Jeffrey M. 2016. Introductory Econometrics: A Modern Approach, 6th edition. Boston, MA: Cengage Learning.

Zimmerman, David J. 1992. “Regression Toward Mediocrity in Economic Stature.” American Economic Review, 82(3), 409–429.