IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp17591.html
   My bibliography  Save this paper

Conditional Rank-Rank Regression

Author

Listed:
  • Chernozhukov, Victor

    (MIT)

  • Fernández-Val, Iván

    (Boston University)

  • Meier, Jonas

    (Swiss National Bank)

  • van Vuuren, Aico

    (University of Groningen)

  • Vella, Francis

    (Georgetown University)

Abstract

Rank-rank regression is commonly employed in economic research as a way of capturing the relationship between two economic variables. It frequently features in studies of intergenerational mobility as the resulting coefficient, capturing the rank correlation between the variables, is easy to interpret and measures overall persistence. However, in many applications it is common practice to include other covariates to account for differences in persistence levels between groups defined by the values of these covariates. In these instances the resulting coefficients can be difficult to interpret. We propose the conditional rank-rank regression, which uses conditional ranks instead of unconditional ranks, to measure average within-group income persistence. The difference between conditional and unconditional rank-rank regression coefficients can then be interpreted as a measure of between-group persistence. We develop a flexible estimation approach using distribution regression and establish a theoretical framework for large sample inference. An empirical study on intergenerational income mobility in Switzerland demonstrates the advantages of this approach. The study reveals stronger intergenerational persistence between fathers and sons compared to fathers and daughters, with the within-group persistence explaining 62% of the overall income persistence for sons and 52% for daughters. Smaller families and those with highly educated fathers exhibit greater persistence in economic status.

Suggested Citation

  • Chernozhukov, Victor & Fernández-Val, Iván & Meier, Jonas & van Vuuren, Aico & Vella, Francis, 2025. "Conditional Rank-Rank Regression," IZA Discussion Papers 17591, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp17591
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp17591.pdf
    Download Restriction: no
    ---><---

    More about this item

    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:iza:izadps:dp17591. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.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.