Daniel D. Schnitzlein
Motivated by the contradictory existing evidence on estimated German intergenerational earnings elasticities (IGE), I present a cross-country comparison of intergenerational earnings mobility in Germany and the US reassessing the question whether intergenerational mobility is higher in Germany compared to the US. In particular I analyze whether the two countries differ in the structure of intergenerational mobility. Therefore, I test for nonlinearities along the distribution of the father's earnings. In addition I present results from an unconditional quantile regression. This changes the perspective of the analysis to the outcome of the transmission process by providing estimates of the IGE at different percentiles of the son's unconditional earnings distribution. According to these contributions, my main results are as follows. Based on comparable international data for father-son pairs, I find no significant differences in the level of intergenerational mobility between Germany and the US. I show that the existing low estimates for the IGE in Germany are not robust against variations in sampling criteria. Regarding the structure of intergenerational mobility, I find no evidence either in Germany or in the US for nonlinearities along the distribution of the father's earnings. When analyzing the relationship along the distribution of the son's earnings, I find that both countries show significant higher intergenerational mobility for the sons at the bottom of their earnings distribution. This means that ending up at the bottom of the earnings distribution is a severe risk for the sons of fathers from all parts of the father's earnings distribution in both countries.
Themen: Arbeit und Beschäftigung
JEL-Classification: J60
Keywords: intergenerational mobility, SOEP, CNEF, Germany, US
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