IDEAS home Printed from https://ideas.repec.org/p/hhs/ifauwp/2016_019.html
   My bibliography  Save this paper

Dynastic human capital, inequality and intergenerational mobility

Author

Listed:
  • Adermon, Adrian

    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

  • Lindahl, Mikael

    (Department of Economics, University of Gothenburg; IFAU; IZA; UCLS; CESifo)

  • Palme, Mårten

    (Department of economics, Stockholm University; IZA)

Abstract

We study the importance of the extended family – or the dynasty – for the persistence in human capital inequality across generations. We use data including the entire Swedish population, linking four generations. This data structure enables us to – in addition to parents, grandparents and great grandparents – identify parents’ siblings and cousins, as well as their spouses, and the spouses’ siblings. We introduce and estimate a new parameter, which we call the intergenerational transmission of dynastic inequality. This parameter measures the between-dynasty variation in intergenerational transmission of human capital. We use three different measures of human capital: years of schooling, family income and an index of occupational status. Our results show that traditional parent-child estimates miss about half of the persistence across generations estimated by the extended model.

Suggested Citation

  • Adermon, Adrian & Lindahl, Mikael & Palme, Mårten, 2016. "Dynastic human capital, inequality and intergenerational mobility," Working Paper Series 2016:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2016_019
    as

    Download full text from publisher

    File URL: http://www.ifau.se/globalassets/pdf/se/2016/wp2016-19-dynastic-human-capital-inequality-and-intergenerational-mobility.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Petter Lundborg & Martin Nordin & Dan Olof Rooth, 2018. "The intergenerational transmission of human capital: the role of skills and health," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(4), pages 1035-1065, October.
    2. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 4, number 4, June.
    3. Anders Björklund & Mikael Lindahl & Erik Plug, 2006. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(3), pages 999-1028.
    4. Braun, Sebastian Till & Stuhler, Jan, 2018. "The Transmission of Inequality Across Multiple Generations: Testing Recent Theories with Evidence from Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 128(609), pages 576-611.
    5. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
    6. Maia Güell & José V. Rodríguez Mora & Christopher I. Telmer, 2015. "The Informational Content of Surnames, the Evolution of Intergenerational Mobility, and Assortative Mating," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(2), pages 693-735.
    7. Dribe, Martin & Helgertz, Jonas, 2016. "The Lasting Impact of Grandfathers: Class, Occupational Status, and Earnings over Three Generations in Sweden 1815–2011," The Journal of Economic History, Cambridge University Press, vol. 76(4), pages 969-1000, December.
    8. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800, Elsevier.
    9. Martin Nybom & Jan Stuhler, 2016. "Heterogeneous Income Profiles and Lifecycle Bias in Intergenerational Mobility Estimation," Journal of Human Resources, University of Wisconsin Press, vol. 51(1), pages 239-268.
    10. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, vol. 96(4), pages 1308-1320, September.
    11. Adrian Adermon & Mikael Lindahl & Daniel Waldenström, 2018. "Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations," Economic Journal, Royal Economic Society, vol. 128(612), pages 482-513, July.
    12. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    13. Jason Long & Joseph Ferrie, 2013. "Intergenerational Occupational Mobility in Great Britain and the United States since 1850," American Economic Review, American Economic Association, vol. 103(4), pages 1109-1137, June.
    14. Gregory Clark & Neil Cummins, 2015. "Intergenerational Wealth Mobility in England, 1858–2012: Surnames and Social Mobility," Economic Journal, Royal Economic Society, vol. 125(582), pages 61-85, February.
    15. Haegeland, Torbjørn & Kirkeboen, Lars & Raaum, Oddbjørn & Salvanes, Kjell G., 2010. "Why Children of College Graduates Outperform their Schoolmates: A Study of Cousins and Adoptees," IZA Discussion Papers 5369, Institute of Labor Economics (IZA).
    16. Jørgen Modalsli, 2023. "Multigenerational Persistence: Evidence from 146 Years of Administrative Data," Journal of Human Resources, University of Wisconsin Press, vol. 58(3), pages 929-961.
    17. Lundborg, Petter & Majlesi, Kaveh, 2018. "Intergenerational transmission of human capital: Is it a one-way street?," Journal of Health Economics, Elsevier, vol. 57(C), pages 206-220.
    18. Claudia Olivetti & M. Daniele Paserman, 2015. "In the Name of the Son (and the Daughter): Intergenerational Mobility in the United States, 1850-1940," American Economic Review, American Economic Association, vol. 105(8), pages 2695-2724, August.
    19. Gary Solon, 2018. "What Do We Know So Far about Multigenerational Mobility?," Economic Journal, Royal Economic Society, vol. 128(612), pages 340-352, July.
    20. Darren Lubotsky & Martin Wittenberg, 2006. "Interpretation of Regressions with Multiple Proxies," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 549-562, August.
    21. Mikael Lindahl & Mårten Palme & Sofia Sandgren Massih & Anna Sjögren, 2015. "Long-Term Intergenerational Persistence of Human Capital: An Empirical Analysis of Four Generations," Journal of Human Resources, University of Wisconsin Press, vol. 50(1), pages 1-33.
    22. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    23. Borjas, George J, 1993. "The Intergenerational Mobility of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 113-135, January.
    24. Nybom, Martin & Vosters, Kelly, 2015. "Intergenerational Persistence in Latent Socioeconomic Status: Evidence from Sweden," Working Paper Series 3/2015, Stockholm University, Swedish Institute for Social Research.
    25. Jason Long & Joseph Ferrie, 2013. "Intergenerational Occupational Mobility in Great Britain and the United States since 1850: Reply," American Economic Review, American Economic Association, vol. 103(5), pages 2041-2049, August.
    26. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 16, pages 1487-1541, Elsevier.
    27. Petra Persson & Maya Rossin-Slater, 2018. "Family Ruptures, Stress, and the Mental Health of the Next Generation," American Economic Review, American Economic Association, vol. 108(4-5), pages 1214-1252, April.
    28. Helena Holmlund & Mikael Lindahl & Erik Plug, 2011. "The Causal Effect of Parents' Schooling on Children's Schooling: A Comparison of Estimation Methods," Journal of Economic Literature, American Economic Association, vol. 49(3), pages 615-651, September.
    29. Daniel Aaronson & Bhashkar Mazumder, 2008. "Intergenerational Economic Mobility in the United States, 1940 to 2000," Journal of Human Resources, University of Wisconsin Press, vol. 43(1).
    30. Petra Persson & Maya Rossin-Slater, 2018. "Family Ruptures, Stress, and the Mental Health of the Next Generation: Reply," American Economic Review, American Economic Association, vol. 108(4-5), pages 1256-1263, April.
    31. Joseph Ferrie & Catherine Massey & Jonathan Rothbaum, 2016. "Do Grandparents and Great-Grandparents Matter? Multigenerational Mobility in the US, 1910-2013," NBER Working Papers 22635, National Bureau of Economic Research, Inc.
    32. Kelly Vosters & Martin Nybom, 2017. "Intergenerational Persistence in Latent Socioeconomic Status: Evidence from Sweden and the United States," Journal of Labor Economics, University of Chicago Press, vol. 35(3), pages 869-901.
    33. Bruce Sacerdote, 2007. "How Large are the Effects from Changes in Family Environment? A Study of Korean American Adoptees," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(1), pages 119-157.
    34. Nybom, Martin & Stuhler, Jan, 2013. "Interpreting Trends in Intergenerational Income Mobility," IZA Discussion Papers 7514, Institute of Labor Economics (IZA).
    35. Gregory Clark, 2015. "The Son Also Rises: Surnames and the History of Social Mobility," Economics Books, Princeton University Press, edition 1, volume 1, number 10181-2.
    36. Andreas Fagereng & Magne Mogstad & Marte Rønning, 2021. "Why Do Wealthy Parents Have Wealthy Children?," Journal of Political Economy, University of Chicago Press, vol. 129(3), pages 703-756.
    37. Robert Hodge, 1966. "Occupational mobility as a probability process," Demography, Springer;Population Association of America (PAA), vol. 3(1), pages 19-34, March.
    38. Kelly Vosters, 2018. "Is the Simple Law of Mobility Really a Law? Testing Clark's Hypothesis," Economic Journal, Royal Economic Society, vol. 128(612), pages 404-421, July.
    39. Paul S Lambert & Erik Bihagen, 2014. "Using occupation-based social classifications," Work, Employment & Society, British Sociological Association, vol. 28(3), pages 481-494, June.
    40. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
    41. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
    42. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-1189, December.
    43. Florencia Torche & Alejandro Corvalan, 2018. "Estimating Intergenerational Mobility With Grouped Data," Sociological Methods & Research, , vol. 47(4), pages 787-811, November.
    44. Lena Lindahl, 2011. "A comparison of family and neighborhood effects on grades, test scores, educational attainment and income—evidence from Sweden," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 207-226, June.
    45. Sebastian Till Braun & Jan Stuhler, 2018. "The Transmission of Inequality Across Multiple Generations: Testing Recent Theories with Evidence from Germany," Economic Journal, Royal Economic Society, vol. 128(609), pages 576-611, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Colagrossi, Marco & d’Hombres, Béatrice & Schnepf, Sylke V, 2020. "Like (grand)parent, like child? Multigenerational mobility across the EU," European Economic Review, Elsevier, vol. 130(C).
    2. Wei Zou & Ruiqi Ma, 2024. "An Extended Family Perspective on Intergenerational Human Capital Transmission in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(3), pages 1101-1139, September.
    3. Martin Nybom & Jan Stuhler, 2019. "Steady-state assumptions in intergenerational mobility research," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(1), pages 77-97, March.
    4. Sebastian Till Braun & Jan Stuhler, 2018. "The Transmission of Inequality Across Multiple Generations: Testing Recent Theories with Evidence from Germany," Economic Journal, Royal Economic Society, vol. 128(609), pages 576-611, March.
    5. Adrian Adermon & Mikael Lindahl & Daniel Waldenström, 2018. "Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations," Economic Journal, Royal Economic Society, vol. 128(612), pages 482-513, July.
    6. Gary Solon, 2018. "What Do We Know So Far about Multigenerational Mobility?," Economic Journal, Royal Economic Society, vol. 128(612), pages 340-352, July.
    7. Jørgen Modalsli & Kelly Vosters, 2024. "Spillover Bias in Multigenerational Income Regressions," Journal of Human Resources, University of Wisconsin Press, vol. 59(3), pages 743-776.
    8. Celhay, Pablo A. & Gallegos, Sebastian, 2023. "Educational Mobility Across Three Generations in Latin American Countries," Research Department working papers 1906, CAF Development Bank Of Latinamerica.
    9. Celhay, Pablo & Gallegos, Sebastian, 2024. "Schooling Mobility across Three Generations in Six Latin American Countries," IZA Discussion Papers 17072, Institute of Labor Economics (IZA).
    10. Maystadt, Jean-François & Migali, Giuseppe, 2021. "The transmission of health across 7 generations in China, 1789–1906," Journal of Health Economics, Elsevier, vol. 79(C).
    11. Shiue, Carol, 2019. "Social Mobility in the Long Run: A Temporal Analysis of China from 1300 to 1900," CEPR Discussion Papers 13589, C.E.P.R. Discussion Papers.
    12. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Barbara Castillo Rico, 2020. "Trends in intergenerational homeownership mobility in France between 1960-2015," AMSE Working Papers 2008, Aix-Marseille School of Economics, France.
    14. Neidhöfer, Guido & Serrano, Joaquín & Gasparini, Leonardo, 2018. "Educational inequality and intergenerational mobility in Latin America: A new database," Journal of Development Economics, Elsevier, vol. 134(C), pages 329-349.
    15. Joseph Ferrie & Catherine Massey & Jonathan Rothbaum, 2016. "Do Grandparents and Great-Grandparents Matter? Multigenerational Mobility in the US, 1910-2013," NBER Working Papers 22635, National Bureau of Economic Research, Inc.
    16. Giacomin Favre & Joël Floris & Ulrich Woitek, 2018. "Intergenerational mobility in the 19th century: micro-level evidence from the city of Zurich," ECON - Working Papers 274, Department of Economics - University of Zurich.
    17. Jonathan Davis & Bhashkar Mazumder, 2017. "The Decline in Intergenerational Mobility After 1980," Working Paper Series WP-2017-5, Federal Reserve Bank of Chicago, revised 14 Jan 2022.
    18. M Dolores Collado & Ignacio Ortuño-Ortín & Jan Stuhler, 2023. "Estimating Intergenerational and Assortative Processes in Extended Family Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(3), pages 1195-1227.
    19. Kumanomido, Hiroshi & Takayasu, Yutaro, 2024. "Elite Persistence in Family: The Role of Adoption in Prewar Japan," OSF Preprints rmdyp, Center for Open Science.
    20. Hsiu-Fen Hsu, 2021. "Intergenerational persistence in latent socioeconomic status: evidence from Taiwan," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(4), pages 753-772, December.

    More about this item

    Keywords

    intergenerational mobility; extended family; dynasty; human capital;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:ifauwp:2016_019. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ali Ghooloo (email available below). General contact details of provider: https://edirc.repec.org/data/ifagvse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.