On the interpretation of the Intergenerational Elasticity and the Rank–Rank coefficients for cross country comparison

Nadav Kunievsky

Economics Letters, 2024, vol. 236, issue C

Abstract: This paper investigates Intergenerational Elasticity (IGE) and Rank–Rank coefficients, employing Yitzhaki’s theorem to express them as weighted averages of underlying causal mechanisms driving mobility. We highlight the challenges of interpreting cross-country comparisons using IGE or Rank–Rank coefficients due to the regression weighting scheme. We also show that, while the Rank–Rank coefficient is more interpretable for positional mobility, it lacks insights into the underlying mechanisms driving mobility across countries. The analysis demonstrates potential drawbacks of using linear regression coefficients as summary statistics in the context of intergenerational mobility comparisons.

Keywords: Intergenerational Elasticity (IGE); Rank–Rank coefficients; Income mobility (search for similar items in EconPapers)
JEL-codes: D31 I24 J62 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:236:y:2024:i:c:s0165176524000648

DOI: 10.1016/j.econlet.2024.111581

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