Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191530
Authors: 
Nilsson, William
Year of Publication: 
2019
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Volume:] 13 [Year:] 2019 [Issue:] 2019-7 [Pages:] 1-20
Abstract: 
A correlation curve is introduced as a tool 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 parents' 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 labour earnings are compared to disposable income. The correlation between the parental income and the child's adult disposable income becomes stronger for higher percentiles in the income distribution of the parents. Above the median the correlation is found to be stronger than for labour earnings. Interestingly, the elasticity is higher for labour earnings for most part of the distribution and complementing the elasticity with correlation curves provides a much more complete picture of the intergenerational income mobility.
Subjects: 
intergenerational mobility
nonlinear
nonparametric
correlation curve
JEL: 
C14
D63
J62
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article
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