Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173162
Authors: 
Coban, Mustafa
Sauerhammer, Sarah
Year of Publication: 
2017
Series/Report no.: 
Working Paper Series 138
Abstract: 
Relying on harmonized individual data for Germany and the United States, we perform a country comparison regarding the underlying mechanisms of the intergenerational income mobility. By applying descriptive and structural decomposition methods, we estimate the relative importance of the transmission of financial resources and endowments within a family. Although the results from both approaches are similar, the structural decompositions rather allow a causal interpretation due to instrumenting the transmission channels. Whereas a family's financial resources and endowments almost equally contribute to the intergenerational income mobility in Germany, endowments account for solely 30 percent in the United States. Nonlinearities in the transmission channels along the income distribution in the United States indicate that the endowment effect slightly decreases in relative importance across income percentiles. In Germany, there are no significant nonlinearities at all.
Subjects: 
intergenerational income elasticity
intergenerational mobility
financial resources
human capital
JEL: 
I24
J24
J62
Document Type: 
Working Paper
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