Intergenerational Earnings Mobility and the Inheritance of Employers

Miles Corak and Patrizio Piraino

No 4876, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Our analysis of intergenerational earnings mobility modifies the Becker-Tomes model to incorporate the intergenerational transmission of employers, which is predicted to increase the intergenerational elasticity of earnings. About 6% of young Canadian men have the same main employer as their fathers but this is positively related to paternal earnings and rises discretely at the top of the distribution. We use a switching regression model and identify two regimes associated with the inheritance of employers that have different intergenerational earnings elasticities. The model also demonstrates that the inheritance of employers plays a role in understanding observed nonlinearities.

Keywords: intergenerational mobility; job search; networks (search for similar items in EconPapers)
JEL-codes: J24 J62 J64 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2010-04
New Economics Papers: this item is included in nep-bec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published - revised version published as: 'The Inheritance of Employers and Nonlinearities in Intergenerational Earnings Mobility.' in: Kaushik Basu and Joseph Stiglitz (editors). Inequality and Growth: Patterns and Policy. London: Palgrave Macmillan. 2016, 1 - 34

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