Less Equal and Less Mobile: Evidence of a Decline in Intergenerational Income Mobility in the United States

Melbourne Institute Working Paper No. 43/13

Date: 2013

Author(s):

Moshe Justman
Anna Krush

Abstract

We use PSID data to 2008 to consider changes in the intergenerational elasticity (IGE) of income in fifteen successive ten-year cohort-groups of sons aged 36-45 between 1997 and 2011. Regressing sons’ estimated lifetime income on fathers’ income within each group, we obtain fifteen IGE estimates, which exhibit a significant rising trend, as do intergenerational correlations and rank correlations. The Gini coefficient of sons’ lifetime income within these groups exhibits a correlation of 0.71 with our IGE estimates, leading us to conclude that as the United States has become economically less equal in recent years it has also become less mobile.

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  • Intergenerational mobility, intergenerational elasticity of income, income inequality, attenuation bias