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The Intergenerational Elasticity of What? The Case for Redefining the Workhorse Measure of Economic Mobility

Author

Listed:
  • Pablo Mitnik

    (Stanford University)

  • David Grusky

    (Stanford University)

Abstract

The intergenerational elasticity (IGE) has been assumed to refer to the expectation of children's income when in fact it pertains to the geometric mean of children's income. We show that mobility analyses based on the conventional IGE have been widely misinterpreted, are subject to selection bias, and cannot disentangle the “channels†underlying intergenerational persistence. The solution to these problems — estimating the IGE of expected income or earnings — returns the field to what it has long meant to estimate. Under this approach, persistence is found to be substantially higher, thus raising the possibility that the field's stock results are misleading.

Suggested Citation

  • Pablo Mitnik & David Grusky, 2018. "The Intergenerational Elasticity of What? The Case for Redefining the Workhorse Measure of Economic Mobility," Working Papers 2018-043, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2018-043
    Note: MIP
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    References listed on IDEAS

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    Cited by:

    1. Pablo Mitnik, 2018. "Estimating the Intergenerational Elasticity of Expected Income with Short-Run Income Measures: A Generalized Error-in-Variables Model," Working Papers 2018-045, Human Capital and Economic Opportunity Working Group.
    2. J. M. C. Santos Silva & Silvana Tenreyro, 2022. "The Log of Gravity at 15," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(3), pages 423-437, September.

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    More about this item

    Keywords

    intergenerational elasticity; geometric mean; IGE;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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