Social Connections and the Persistence of Income Across Generations

Laliberté, Jean-William () and Alexander Whalley
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Laliberté, Jean-William: University of Calgary
Authors registered in the RePEc Author Service: Jean-William Laliberté

No 18691, IZA Discussion Papers from IZA Network @ LISER

Abstract: We use matched parent-child-employer-employee data from Canada, linked to detailed educational records, to quantify the contribution of social connections to employers to intergenerational income mobility. Sorting across employers accounts for roughly a third of the transmission of income across generations. To estimate the impact of social connections on differential representation across employers, we compare classmates -- those with the same degree from the same institution -- who have different social connections. We find social connections in the labor market explain about 15% of the firm-sorting component of the intergenerational income rank-rank relationship, about a third the explanatory power of education.

Keywords: social connections; intergenerational mobility (search for similar items in EconPapers)
JEL-codes: E24 J24 J31 J62 L25 (search for similar items in EconPapers)
Date: 2026-05
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp18691

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