Reassessing intergenerational mobility in Germany and the United States: The impact of differences in lifecycle earnings patterns

Thorsten Vogel

No 2006-055, SFB 649 Discussion Papers from Humboldt University Berlin, Collaborative Research Center 649: Economic Risk

Abstract: Using longitudinal data on fathers and their children, this study compares the extent of intergenerational mobility in Germany and the United States and introduces an estimation strategy that corrects estimates of intergenerational earnings elasticities for a possible lifecycle bias. In contrast to previous studies, we find that the extent of intergenerational mobility is more limited in the US than in Germany. Furthermore, while the errors-in-variables problems have been dealt with extensively in the literature, the inconsistencies in standard mobility measures due to lifecycle effects have attracted much less attention. The present paper proposes an estimation method that corrects for such inconsistencies. The extent of this lifecycle bias is found to be strong in Germany but only modest in the US.

Keywords: Intergenerational mobility; lifecycle bias; comparison of Germany and the US (search for similar items in EconPapers)
JEL-codes: D31 J31 J62 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb649:sfb649dp2006-055

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