What is the source of the intergenerational correlation in earnings?

George-Levi Gayle (), Limor Golan () and Mehmet Soytas ()

No 2015-19, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper uses a dynastic model of household behavior to estimate and decomposed the correlations in earnings across generations. The estimate model can explain 75% to 80% of the observed correlation in lifetime earnings between fathers and sons, mothers and daughters, and families across generations. The main results are that the family and division of labor within the household are the main source of the correlation across generation and not just assorting mating. The interaction of human capital accumulation in labor market, the nonlinear return to part-time versus full-time work, and the return parental time investment in children are the main driving force behind the intergenerational correlation in earnings and assortative mating just magnify these forces.

Keywords: Intergenerational Models; Estimation; Discrete Choice; Human Capital; PSID (search for similar items in EconPapers)
JEL-codes: C13 J13 J22 J62 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2015-08-24
New Economics Papers: this item is included in nep-dcm, nep-dem and nep-hrm
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Citations: View citations in EconPapers (17)

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Related works:
Journal Article: What is the source of the intergenerational correlation in earnings? (2022)
Working Paper: What Is The Source Of The Intergenerational Correlation In Earnings? (2016)
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