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Title:Empirical strategies to eliminate life-cycle bias in the intergenerational elasticity of earnings literature PDF Logo
Authors:Stuhler, Jan Leonard
Issue Date:2010
Series/Report no.:Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5245
Abstract:I argue that the empirical strategies for estimation of the intergenerational elasticity of lifetime earnings that are currently employed in the literature might not eliminate bias arising from lifecycle effects. Specifically, I demonstrate that procedures based on the generalized errors-invariables model suggested by Haider and Solon (2006) or the consideration of differential earnings growth rates across subpopulations may not yield unbiased or consistent estimates. I further argue that instrumental variable estimators will not identify an upper bound for the true population parameter.
Subjects:intergenerational mobility
intergenerational elasticity of earnings
life-cycle bias
generalized errors-in-variables model
JEL:J62
C23
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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