Estimating Nonlinear Intergenerational Income Mobility with Correlation Curves

William Nilsson

No 57, DEA Working Papers from Universitat de les Illes Balears, Departament d'Economía Aplicada

Abstract: A correlation curve is proposed as an alternative measure to study the degree of intergenerational income mobility, i.e. how income status is related between parents and adult child. The method overcomes the shortcomings of the elasticity of children’s income with respect to fathers’ income (i.e. its sensitiveness to different dispersion among the generations) and the correlation coefficient (i.e. its inability to capture nonlinearities). The method is particularly suitable for comparative studies and in this study is applied to labour income in comparison to disposable income. Nonlinear correlation curves are found, which in some cases substantially differ from corresponding nonlinear elasticities.

Keywords: Intergenerational mobility; nonlinear; nonparametric; correlation curve (search for similar items in EconPapers)
JEL-codes: C14 D63 J62 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dem
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Journal Article: Estimating nonlinear intergenerational income mobility with correlation curves (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ubi:deawps:57

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