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Consumption and Income Inequality across Generations

Giovanni Gallipoli (), Hamish Low () and Aruni Mitra ()
Additional contact information
Hamish Low: University of Oxford
Aruni Mitra: European University Institute

No 2020-061, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: We characterize the joint evolution of cross-sectional inequality in earnings, other sources of income and consumption across generations in the U.S. To account for cross-sectional dispersion, we estimate a model of intergenerational persistence and separately identify the influences of parental factors and of idiosyncratic life-cycle components. We find evidence of family persistence in earnings, consumption and saving behaviours, and marital sorting patterns. However, the quantitative contribution of idiosyncratic heterogeneity to cross-sectional inequality is significantly larger than parental effects. Our estimates imply that intergenerational persistence is not high enough to induce further large increases in inequality over time and across generations.

Keywords: income; Consumption; intergenerational persistence; Inequality (search for similar items in EconPapers)
JEL-codes: D15 D64 E21 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-dge
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http://humcap.uchicago.edu/RePEc/hka/wpaper/Gallip ... lity-generations.pdf First version, August 11, 2020 (application/pdf)

Related works:
Working Paper: Consumption and Income Inequality across Generations (2021) Downloads
Working Paper: Consumption and Income Inequality across Generations (2020) Downloads
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