Consumption and Income Inequality across Generations

Giovanni Gallipoli (), Hamish Low and Aruni Mitra

No 15166, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We characterize the joint evolution of cross-sectional inequality in income and consumption across generations. We estimate a model of intergenerational persistence and separately identify influences of parental heterogeneity and idiosyncratic factors. We find evidence of family persistence in earnings and consumption, and of marital sorting. Idiosyncratic heterogeneity, however, accounts for most of cross-sectional inequality. Within-family insurance represents a modest part of overall consumption insurance and is largest for the richest quartile. Insurance among the poorest comes from outside the family. Our findings suggest intergenerational persistence would have to be much higher to induce, by itself, substantial increases in inequality.

Keywords: Income; Consumption; Intergenerational persistence; Inequality (search for similar items in EconPapers)
JEL-codes: D1 D64 E24 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-age and nep-mac
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Consumption and income inequality across generations (2022)
Working Paper: Consumption and Income Inequality across Generations (2021)
Working Paper: Consumption and Income Inequality across Generations (2020)
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