IDEAS home Printed from https://ideas.repec.org/p/qss/dqsswp/1417.html
   My bibliography  Save this paper

Two-Sample Two-Stage Least Squares (TSTSLS) estimates of earnings mobility: how consistent are they?

Author

Listed:
  • John Jerrim

    (Department of Quantitative Social Science, Institute of Education, University of London)

  • Alvaro Choi

    (Institut d’Economia de Barcelona, University of Barcelona)

  • Rosa Simancas Rodriguez

    (University of Extremadura)

Abstract

Academics and policymakers have shown great interest in cross-national comparisons of intergenerational earnings mobility. However, producing consistent and comparable estimates of earnings mobility is not a trivial task. In most countries researchers are unable to observe earnings information for two generations. They are thus forced to rely upon imputed data instead. This paper builds upon previous work by considering the consistency of the intergenerational correlation (Ï ) as well as the elasticity (β), how this changes when using a range of different instrumental (imputer) variables, and highlighting an important but infrequently discussed measurement issue. Our key finding is that, while TSTSLS estimates of β and Ï are both likely to be inconsistent, the magnitude of this problem is much greater for the former than it is for the latter. We conclude by offering advice on estimating earnings mobility using this methodology.

Suggested Citation

  • John Jerrim & Alvaro Choi & Rosa Simancas Rodriguez, 2014. "Two-Sample Two-Stage Least Squares (TSTSLS) estimates of earnings mobility: how consistent are they?," DoQSS Working Papers 14-17, Quantitative Social Science - UCL Social Research Institute, University College London.
    • Handle: RePEc:qss:dqsswp:1417
    as

    Download full text from publisher

    File URL: https://repec.ucl.ac.uk/REPEc/pdf/qsswp1417.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:adr:anecst:y:2005:i:78:p:03 is not listed on IDEAS
    2. Arnaud Lefranc & Alain Trannoy, 2005. "Intergenerational earnings mobility in France: Is France more mobile than the U.S.?," Annals of Economics and Statistics, GENES, issue 78, pages 57-77.
    3. 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).
    4. Corak,Miles (ed.), 2004. "Generational Income Mobility in North America and Europe," Cambridge Books, Cambridge University Press, number 9780521827607, September.
    5. Dan Andrews & Andrew Leigh, 2009. "More inequality, less social mobility," Applied Economics Letters, Taylor & Francis Journals, vol. 16(15), pages 1489-1492.
    6. Nicoletti Cheti & Ermisch John F, 2008. "Intergenerational Earnings Mobility: Changes across Cohorts in Britain," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(2), pages 1-38, January.
    7. Piraino Patrizio, 2007. "Comparable Estimates of Intergenerational Income Mobility in Italy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(2), pages 1-27, October.
    8. Piraino, Patrizio, 2015. "Intergenerational Earnings Mobility and Equality of Opportunity in South Africa," World Development, Elsevier, vol. 67(C), pages 396-405.
    9. Ueda Atsuko, 2009. "Intergenerational Mobility of Earnings and Income in Japan," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-27, December.
    10. Honge Gong & Andrew Leigh & Xin Meng, 2012. "Intergenerational Income Mobility In Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(3), pages 481-503, September.
    11. Arnaud Lefranc, 2011. "Educational expansion, earnings compression and changes in intergenerational economic mobility : Evidence from French cohorts, 1931-1976," THEMA Working Papers 2011-11, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    12. Liu, Di & Murtazashvili, Irina & Prokhorov, Artem, 2013. "Two-Sample Nonparametric Estimation of Intergenerational Income Mobili ty," Working Papers 07_2013, University of Sydney Business School, Discipline of Business Analytics.
    13. Bauer, Philipp, 2006. "The Intergenerational Transmission of Income in Switzerland - A Comparison between Natives and Immigrants," Working papers 2006/01, Faculty of Business and Economics - University of Basel.
    14. Ferreira, Sergio Guimarães & Veloso, Fernando A., 2006. "Intergenerational Mobility of Wages in Brazil," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 26(2), November.
    15. Patrizio Piraino, 2014. "Intergenerational earnings mobility and equality of opportunity in South Africa," Working Papers 448, Economic Research Southern Africa.
    16. Javier Núñez & Leslie Miranda, 2011. "Intergenerational income and educational mobility in urban Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 38(1 Year 20), pages 195-221, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Gregg & Ricky Kanabar, 2022. "Parental homeownership and education: the implications for offspring wealth inequality in GB," CEPEO Working Paper Series 22-01, UCL Centre for Education Policy and Equalising Opportunities, revised Jul 2023.
    2. Paul Gregg & Lindsey Macmillan & Claudia Vittori, 2017. "Moving Towards Estimating Sons' Lifetime Intergenerational Economic Mobility in the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(1), pages 79-100, February.
    3. Paul Gregg & Ricky Kanabar, 2023. "Intergenerational wealth transmission in Great Britain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(4), pages 807-837, December.
    4. Álvaro Choi & María Gil & Mauro Mediavilla & Javier Valbuena, 2016. "Double toil and trouble: grade retention and academic performance," Working Papers 2016/7, Institut d'Economia de Barcelona (IEB).
    5. Pacini, David & Windmeijer, Frank, 2016. "Robust inference for the Two-Sample 2SLS estimator," Economics Letters, Elsevier, vol. 146(C), pages 50-54.
    6. Álvaro Choi & María Gil & Mauro Mediavilla & Javier Valbuena, 2016. "The evolution of educational inequalities in Spain: dynamic evidence from repeated cross-sections," Working Papers 2016/25, Institut d'Economia de Barcelona (IEB).

    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. John Jerrim & Álvaro Choi & Rosa Simancas Rodríguez, 2014. "Two-sample two-stage least squares (TSTSLS) estimates of earnings mobility: how consistent are they?," Working Papers 2014/35, Institut d'Economia de Barcelona (IEB).
    2. Doan, Quang Hung & Nguyen, Ngoc Anh, 2016. "Intergenerational Income Mobility in Vietnam," MPRA Paper 70603, University Library of Munich, Germany.
    3. Quheng Deng & Björn Gustafsson & Shi Li, 2013. "Intergenerational Income Persistence in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(3), pages 416-436, September.
    4. Arnaud Lefranc & Fumiaki Ojima & Takashi Yoshida, 2014. "Intergenerational earnings mobility in Japan among sons and daughters: levels and trends," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(1), pages 91-134, January.
    5. Piraino, Patrizio, 2015. "Intergenerational Earnings Mobility and Equality of Opportunity in South Africa," World Development, Elsevier, vol. 67(C), pages 396-405.
    6. Sajid Amin Javed & Mohammad Irfan, 2014. "Intergenerational Mobility: Evidence from Pakistan Panel Household Survey," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 53(2), pages 175-203.
    7. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. María Cervini-Plá, 2013. "Exploring the Sources of Earnings Transmission in Spain," Hacienda Pública Española / Review of Public Economics, IEF, vol. 204(1), pages 45-66, March.
    9. Nunez Javier I & Miranda Leslie, 2010. "Intergenerational Income Mobility in a Less-Developed, High-Inequality Context: The Case of Chile," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-17, April.
    10. María Cervini-Plá, 2015. "Intergenerational Earnings and Income Mobility in Spain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(4), pages 812-828, December.
    11. Blanden, Jo, 2009. "How much can we learn from international comparisons of intergenerational mobility?," LSE Research Online Documents on Economics 28283, London School of Economics and Political Science, LSE Library.
    12. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    13. Yu-Wei Luke Chu & Ming-Jen Lin, 2020. "Intergenerational earnings mobility in Taiwan: 1990–2010," Empirical Economics, Springer, vol. 59(1), pages 11-45, July.
    14. Soobin Kim, 2017. "Intergenerational mobility in Korea," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-18, December.
    15. Dang, Thang, 2015. "Intergenerational mobility of earnings and income among sons and daughters in Vietnam," MPRA Paper 75357, University Library of Munich, Germany.
    16. 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.
    17. Blanden, Jo, 2013. "Cross-national rankings of intergenerational mobility: a comparison of approaches from economics and sociology," LSE Research Online Documents on Economics 59310, London School of Economics and Political Science, LSE Library.
    18. Arnaud Lefranc, 2018. "Intergenerational earnings persistence and economic inequality in the long-run : Evidence from French cohorts, 1931-1975," Post-Print hal-02528217, HAL.
    19. Ben-Halima, B. & Chusseau, N. & Hellier, J., 2014. "Skill premia and intergenerational education mobility: The French case," Economics of Education Review, Elsevier, vol. 39(C), pages 50-64.
    20. Honge Gong & Andrew Leigh & Xin Meng, 2012. "Intergenerational Income Mobility In Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(3), pages 481-503, September.

    More about this item

    Keywords

    : Earnings mobility; two sample two stage least squares;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

    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:qss:dqsswp:1417. 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: Dr Neus Bover Fonts (email available below). General contact details of provider: https://edirc.repec.org/data/dqioeuk.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.