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THE INTERGENERATIONAL CORRELATION BETWEEN CHILDREN'S ADULT EARNINGS AND THEIR PARENTS' INCOME: RESULTS FROM THE MICHIGAN PANEL SURVEY OF INCOME DYNAMICS
Author(s) -
Behrman Jere R.,
Taubman Paul
Publication year - 1990
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1990.tb00275.x
Subject(s) - panel study of income dynamics , earnings , economics , demographic economics , survey of income and program participation , income elasticity of demand , panel data , permanent income hypothesis , market liquidity , labour economics , econometrics , macroeconomics , accounting
Intergenerational correlations between parental income and child earnings reflect the extent of intergenerational economic mobility and equality of opportunity. Previous estimates are about 0.2, but these estimates suffer from a number of problems, including the use of but one year of observations and of nonrandom samples. We present new estimates based on the Panel Study of Income Dynamics. These estimates suggest correlations over 0.5 with longer‐run income and earning measures, as well as some gender and race differences and some impact of liquidity constraints. They also suggest that the intergenerational elasticity is greater as parental income increases, the opposite of the Becker‐Tomes conjecture.