Re: [OPE-L] Earnings mobility

From: Bill Cochrane (BILLC@WAIKATO.AC.NZ)
Date: Mon Jan 23 2006 - 14:49:08 EST

For those of you who don't get IZA working papers I was particularly taken with the following paper on intergenerational earnings mobility. The authors claim (p 17) that "Comparing the Nordic matrices with those of the U.S., there is one difference that immediately stands out as significant, substantively as well as statistically, and that is the much lower upwards mobility out of the poorest quintile group in the U.S.More than 40 per cent of U.S. males born into this position remain there."
Apparently the view of higher income mobility in the US is only held by the middle class - who are in fact mobile.

The abstract - IZA DP No. 1938

Markus Jäntti, Bernt Bratsberg, Knut Roed, Oddbjørn Raaum, Robin Naylor, Eva Österbacka, Anders Björklund, Tor Eriksson: 

American Exceptionalism in a New Light: A Comparison of Intergenerational Earnings Mobility in the Nordic Countries, the United Kingdom and the United States 

We develop methods and employ similar sample restrictions to analyse differences in intergenerational earnings mobility across the United States, the United Kingdom, Denmark, Finland, Norway and Sweden. We examine earnings mobility among pairs of fathers and sons as well as fathers and daughters using both mobility matrices and regression and correlation coefficients. Our results suggest that all countries exhibit substantial earnings persistence across generations, but with statistically significant differences across countries. Mobility is lower in the U.S. than in the U.K., where it is lower again compared to the Nordic countries. Persistence is greatest in the tails of the distributions and tends to be particularly high in the upper tails: though in the U.S. this is reversed with a particularly high likelihood that sons of the poorest fathers will remain in the lowest earnings quintile. This is a challenge to the popular notion of 'American exceptionalism'. The U.S. also! differs from the Nordic countries in its very low likelihood that sons of the highest earners will show downward 'long-distance' mobility into the lowest earnings quintile. In this, the U.K. is more similar to the U.S..

Bill Cochrane
Research Fellow 
Population Studies Centre
Centre for Labour and Trade Union Studies 
University of Waikato 
New Zealand 
Ph 64 7 838 4023
Cell 021 346300 
Fax 64 7 838 4621

This archive was generated by hypermail 2.1.5 : Sat Jan 28 2006 - 00:00:02 EST