Earnings dynamics and intergenerational transmission of skill

Lance Lochner and Youngmin Park

Journal of Econometrics, 2024, vol. 243, issue 1

Abstract: This paper develops and estimates a two-factor model of intergenerational skill transmission when earnings inequality reflects differences in individual skills and other non-skill shocks. We consider heterogeneity in both initial skills and skill growth rates, allowing variation in skill growth to change over the lifecycle. Using administrative tax data on two linked generations of Canadians covering 37 years, we exploit covariances in log earnings (at different ages) both across and within generations to identify and estimate the intergenerational correlation structure for initial skills and skill growth rates, lifecycle skill growth profiles, and the dynamics of non-skill earnings shocks.

Keywords: Earnings dynamics; Intergenerational mobility; Earnings inequality; Skills; Great Gatsby Curve (search for similar items in EconPapers)
JEL-codes: D31 E24 J24 J31 J62 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Earnings Dynamics and Intergenerational Transmission of Skill (2020)
Working Paper: Earnings Dynamics and Intergenerational Transmission of Skill (2020)
Working Paper: Earnings Dynamics and Intergenerational Transmission of Skill (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:243:y:2024:i:1:s0304407622000343

DOI: 10.1016/j.jeconom.2021.12.009

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