A Lifecycle Estimator of Intergenerational Income Mobility

Ursula Mello (), Martin Nybom () and Jan Stuhler ()
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Ursula Mello: Insper, São Paulo
Martin Nybom: Institute for Evaluation of Labour Market and Education Policy (IFAU)
Jan Stuhler: Universidad Carlos III de Madrid

No 18329, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Lacking lifetime income data, most intergenerational mobility estimates are subject to lifecycle bias. Using long income series from Sweden and the US, we illustrate that standard correction methods struggle to account for one important property of income processes: children from affluent families experience faster income growth, even conditional on their own characteristics. We propose a lifecycle estimator that captures this pattern and performs well across different settings. We apply the estimator to study mobility trends, including for recent cohorts that could not be considered in prior work. Despite rising income inequality, intergenerational mobility remained largely stable in both countries.

Keywords: lifecycle bias; intergenerational mobility; income processes (search for similar items in EconPapers)
JEL-codes: J62 (search for similar items in EconPapers)
Date: 2025-12
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