Estimation of intergenerational mobility in small samples: evidence from German survey data

Iryna Kyzyma () and Olaf Groh-Samberg
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Iryna Kyzyma: Luxembourg Institute of Socio-Economic Research and IZA Bonn
Olaf Groh-Samberg: University of Bremen

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2020, vol. 151, issue 2, No 12, 643 pages

Abstract: Abstract Using data from the German socio-economic panel, this paper provides new evidence on intergenerational mobility in Germany by focusing on intergenerational association in ranks—i.e. positions, which parents and children occupy in their respective income distributions. We find that the association of children’s ranks with ranks of their fathers is about 0.242 for individual labor earnings and it is higher for sons than for daughters. It is also higher in East Germany compared to West Germany. The results further show that rank-based measures of mobility are less sensitive than conventional measures of intergenerational income elasticity to different methodological and sample specification choices, such as the stages of the life cycle when incomes of children and parents are measured, the number of years for which incomes are considered, the treatment of zero values in income variables and the choice of annual versus hourly earnings. Moreover, they are more robust for sub-group comparisons of intergenerational mobility (e.g. across gender and region). This evidence suggests that, similarly to large administrative datasets, rank-based measures of intergenerational mobility perform better than elasticity-based measures in small samples based on survey data.

Keywords: Intergenerational income elasticity; Intergenerational mobility; Rank-based measures of mobility; Robustness; Small samples (search for similar items in EconPapers)
JEL-codes: D31 D63 J62 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11205-020-02378-9

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