Status Traps

Steven Durlauf, Andros Kourtellos and Chih Ming Tan

Journal of Business & Economic Statistics, 2017, vol. 35, issue 2, 265-287

Abstract: In this article, we explore nonlinearities in the intergenerational mobility process using threshold regression models. We uncover evidence of threshold effects in children's outcomes based on parental education and cognitive and noncognitive skills as well as their interaction with offspring characteristics. We interpret these thresholds as organizing dynastic earning processes into “status traps.” Status traps, unlike poverty traps, are not absorbing states. Rather, they reduce the impact of favorable shocks for disadvantaged children and so inhibit upward mobility in ways not captured by linear models. Our evidence of status traps is based on three complementary datasets; that is, the PSID, the NLSY, and US administrative data at the commuting zone level, which together suggest that the threshold-like mobility behavior we observe in the data is robust for a range of outcomes and contexts.

Date: 2017
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Working Paper: Status Traps (2016)
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DOI: 10.1080/07350015.2016.1189339

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