Search Results

Author: Mazumder, Bhashkar
Resulting in 15 citations.
1. Agarwal, Sumit
Mazumder, Bhashkar
Cognitive Abilities and Household Financial Decision Making
FRB of Chicago Working Paper No. 2010-16, Federal Reserve Bank of Chicago, March 28, 2011.
Also: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1651312
Cohort(s): NLSY79
Publisher: Federal Reserve Bank of Chicago
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Behavior; Cognitive Ability; Credit/Credit Constraint; Debt/Borrowing; Financial Literacy; Financial Market Participation; Health and Retirement Study (HRS); Household Income

Permission to reprint the abstract has not been received from the publisher.

We analyze the effects of cognitive abilities on two examples of consumer financial decisions where suboptimal behavior is well defined. The first example refers to consumers who transfer the entire balance from an existing credit card account to a new account, but use the new card for convenience transactions, resulting in higher interest charges. The second example refers to consumers who face higher APRs because they inaccurately estimate their property value on a home equity loan or line of credit application. We match individuals from the US military for whom we have detailed test scores from the Armed Services Vocational Aptitude Battery test (ASVAB), to administrative datasets of retail credit from a large financial institution. We show that our matched samples are reasonably representative of the universes from which they are drawn. We find that consumers with higher overall composite test scores, and specifically those with higher math scores, are substantially less likely to make a financial mistake later in life. These mistakes are generally not associated with the non-mathematical component scores. We also conduct some complementary analyses using two other data sources. We use the National Longitudinal Survey of Youth (NLSY) to show that higher ASVAB math scores are associated with lower subjective discount rates. Finally, we use the Health and Retirement Survey (HRS) to demonstrate that particular forms of cognitive ability matter for specific types of suboptimal behavior. We find that the mathematical component of the test is what matters most for financial decision making and financial wealth. In contrast, non-mathematical aptitudes appear to matter for non-financial forms of suboptimal behavior (e.g. failure to take medicine). The HRS results also demonstrate the large ramifications of low math ability on long-term economic success.
Bibliography Citation
Agarwal, Sumit and Bhashkar Mazumder. "Cognitive Abilities and Household Financial Decision Making." FRB of Chicago Working Paper No. 2010-16, Federal Reserve Bank of Chicago, March 28, 2011.
2. Bhattacharya, Debopam
Mazumder, Bhashkar
A Nonparametric Analysis of Black-White Differences in Intergenerational Income Mobility in the United States
University of Oxford Working Paper, Department of Economics, Oxford University, March 22, 2011
Cohort(s): NLSY79
Publisher: Department of Economics, Oxford University
Keyword(s): Armed Forces Qualifications Test (AFQT); Disadvantaged, Economically; Earnings; Income Distribution; Intergenerational Patterns/Transmission; Mobility, Economic; Modeling, Nonparametric Regression; Racial Differences; Wage Gap

Permission to reprint the abstract has not been received from the publisher.

Lower intergenerational income mobility for blacks is a likely cause behind the persistent inter-racial gap in economic status in the US. However, few studies have analyzed black-white differences in intergenerational income mobility and the factors that determine these differences. This is largely due to the absence of appropriate methodological tools. We develop nonparametric methods to estimate the effects of covariates on two measures of mobility. We first consider the traditional transition probability of movement across income quantiles. We then introduce a new measure of upward mobility which is the probability that an adult child's relative position exceeds that of the parents. Conducting statistical inference on these mobility measures and the effects of covariates on them requires nontrivial modifications of standard nonparametric regression theory since the dependent variables are nonsmooth functions of marginal quantiles or relative ranks. Using NLSY data, we document that blacks experience much less upward mobility across generations than whites. Applying our new methodological tools, we find that most of this gap can be accounted for by differences in cognitive skills during adolescence.
Bibliography Citation
Bhattacharya, Debopam and Bhashkar Mazumder. "A Nonparametric Analysis of Black-White Differences in Intergenerational Income Mobility in the United States." University of Oxford Working Paper, Department of Economics, Oxford University, March 22, 2011.
3. Bhattacharya, Debopam
Mazumder, Bhashkar
A Nonparametric Analysis of Black-White Differences in Intergenerational Income Mobility in the United States
Quantitative Economics 2,3 (November 2011): 335-379.
Also: http://onlinelibrary.wiley.com/doi/10.3982/QE69/abstract
Cohort(s): NLSY79
Publisher: Wiley Online
Keyword(s): Armed Forces Qualifications Test (AFQT); Income; Intergenerational Patterns/Transmission; Mobility; Mobility, Economic; Racial Differences; Wage Gap

Permission to reprint the abstract has not been received from the publisher.

Lower intergenerational income mobility for blacks is a likely cause behind the persistent interracial gap in economic status in the United States. However, few studies have analyzed black–white differences in intergenerational income mobility and the factors that determine these differences. This is largely due to the absence of appropriate methodological tools. We develop nonparametric methods to estimate the effects of covariates on two measures of mobility. We first consider the traditional transition probability of movement across income quantiles. We then introduce a new measure of upward mobility which is the probability that an adult child's relative position exceeds that of the parents. Conducting statistical inference on these mobility measures and the effects of covariates on them requires nontrivial modifications of standard nonparametric regression theory since the dependent variables are nonsmooth functions of marginal quantiles or relative ranks. Using National Longitudinal Survey of Youth data, we document that blacks experience much less upward mobility across generations than whites. Applying our new methodological tools, we find that most of this gap can be accounted for by differences in cognitive skills during adolescence.
Bibliography Citation
Bhattacharya, Debopam and Bhashkar Mazumder. "A Nonparametric Analysis of Black-White Differences in Intergenerational Income Mobility in the United States." Quantitative Economics 2,3 (November 2011): 335-379.
4. Bratberg, Espen
Davis, Jonathan
Mazumder, Bhashkar
Nybom, Martin
Schnitzlein, Daniel
Vaage, Kjell
A Comparison of Intergenerational Mobility Curves in Germany, Norway, Sweden and the U.S.
Working Paper in Economics No. 1/15, Department of Economics, University of Bergen, Norway, February 2015.
Also: http://www.uib.no/sites/w3.uib.no/files/attachments/working_paper_01-15.pdf
Cohort(s): NLSY79
Publisher: University of Bergen, Norway
Keyword(s): Cross-national Analysis; Family Income; German Socio-Economic Panel (GSOEP); Income Distribution; Intergenerational Patterns/Transmission; Mobility, Economic; Norway, Norwegian; Sweden, Swedish

Permission to reprint the abstract has not been received from the publisher.

We use two non-parametric measures to characterize intergenerational mobility (IGM) throughout the income distribution: Rank Mobility and Income Share Mobility. We examine differences in these IGM curves between Germany, Norway, Sweden and the United States using comparable samples. Although we find that these curves are approximately linear through most of the income distribution, non-linearities are important in describing cross-country differences. The linear representations of these curves lead to different conclusions regarding cross-country differences depending on the measure. Using ranks, we find that the U.S. is substantially less intergenerationally mobile than the three European countries which have fairly similar degrees of rank mobility. Despite the substantial heterogeneity in intergenerational rank mobility within the U.S., we show that the most mobile region of the U.S. is still less mobile than the least mobile regions of Norway and Sweden. When we use a linear estimator of Income Share Mobility we find that the four countries have very similar rates of IGM. However, there are some notable cross-country differences at the bottom and the top of the income distribution for both types of mobility. For example, the U.S. tends to experience lower upward mobility at the very bottom of the income distribution according to both measures. We conclude that researchers should be careful in drawing conclusions regarding cross-country differences in intergenerational mobility given that the results may be sensitive to the concept being used and to non-linearities.
Bibliography Citation
Bratberg, Espen, Jonathan Davis, Bhashkar Mazumder, Martin Nybom, Daniel Schnitzlein and Kjell Vaage. "A Comparison of Intergenerational Mobility Curves in Germany, Norway, Sweden and the U.S." Working Paper in Economics No. 1/15, Department of Economics, University of Bergen, Norway, February 2015.
5. Chay, Kenneth Y.
Guryan, Jonathan
Mazumder, Bhashkar
Birth Cohort and the Black-White Achievement Gap: The Roles of Access and Health Soon After Birth
NBER Working Paper 15078, National Bureau of Economic Research, June 2009.
Also: http://www.nber.org/papers/w15078
Cohort(s): NLSY79
Publisher: National Bureau of Economic Research (NBER)
Keyword(s): Armed Forces Qualifications Test (AFQT); Health Care; Mortality; National Assessment of Educational Progress (NAEP); Pre/post Natal Health Care; Racial Differences; Sample Selection

One literature documents a significant, black-white gap in average test scores, while another finds a substantial narrowing of the gap during the 1980's, and stagnation in convergence after. We use two data sources -- the Long Term Trends NAEP and AFQT scores for the universe of applicants to the U.S. military between 1976 and 1991 -- to show: 1) the 1980's convergence is due to relative improvements across successive cohorts of blacks born between 1963 and the early 1970's and not a secular narrowing in the gap over time; and 2) the across-cohort gains were concentrated among blacks in the South. We then demonstrate that the timing and variation across states in the AFQT convergence closely tracks racial convergence in measures of health and hospital access in the years immediately following birth. We show that the AFQT convergence is highly correlated with post-neonatal mortality rates and not with neonatal mortality and low birth weight rates, and that this result cannot be explained by schooling desegregation and changes in family background. We conclude that investments in health through increased access at very early ages have large, long-term effects on achievement, and that the integration of hospitals during the 1960's affected the test performance of black teenagers in the 1980's. The AFQT percentile scores are normed relative to the nationally representative sample called the Profile of American Youth from the 1979 National Longitudinal Survey of Youth (NLSY79). The NLSY sample was used to norm the AFQT using the sample of 18-23 year olds tested in 1979. A well-documented misnorming of the AFQT for the period between 1976 and 1980 led the military to inadvertently admit many more low-scoring applicants than it intended during this period. All years of our data are normed relative to the same NLSY79 cohort, even those from the misnormed period. The AFQT was subsequently renormed based on the 1997 NLSY, but this occurred after all of the cohorts in our study took the test. Consistent with the re-norming of the AFQT, application rates for the less-educated fall sharply in 1982, though overall military application remains relatively stable.
Bibliography Citation
Chay, Kenneth Y., Jonathan Guryan and Bhashkar Mazumder. "Birth Cohort and the Black-White Achievement Gap: The Roles of Access and Health Soon After Birth." NBER Working Paper 15078, National Bureau of Economic Research, June 2009.
6. Davis, Jonathan
Mazumder, Bhashkar
The Decline in Intergenerational Mobility After 1980
Presented: Chicago IL, American Economic Association Annual Meeting, January 2017
Cohort(s): Mature Women, NLSY79, Older Men, Young Men, Young Women
Publisher: American Economic Association
Keyword(s): Family Income; Intergenerational Patterns/Transmission; Mobility, Economic

Permission to reprint the abstract has not been received from the publisher.

We present new evidence using National Longitudinal Surveys (NLS) which shows a sharp decline in intergenerational mobility across cohorts born between 1942 and 1953 compared to those born between 1957 and 1964. The former entered the labor market prior to the large rise in inequality that occurred around 1980 while the latter cohorts entered the labor market largely after this inflection point in inequality. We show that the rank-rank slope rose from 0.27 to 0.4 and the IGE rose from 0.35 to 0.52 across these two cohort groups. The share of children whose income exceeds that of their parents fell by about 4 percentage points. These findings suggest that relative mobility fell by substantially more than absolute mobility.
Bibliography Citation
Davis, Jonathan and Bhashkar Mazumder. "The Decline in Intergenerational Mobility After 1980." Presented: Chicago IL, American Economic Association Annual Meeting, January 2017.
7. Levine, David I.
Mazumder, Bhashkar
Choosing the Right Parents: Changes in the Intergenerational Transmission of Inequality Between 1980 and the Early 1990s
Working Paper No. 2002-08, Federal Reserve Bank of Chicago, June 2002.
Also: http://www.chicagofed.org/publications/workingpapers/papers/wp2002-08.pdf
Cohort(s): NLSY79, Young Men
Publisher: Federal Reserve Bank of Chicago
Keyword(s): Earnings; Family Income; General Social Survey (GSS); Human Capital; Intergenerational Patterns/Transmission; Panel Study of Income Dynamics (PSID)

Permission to reprint the abstract has not been received from the publisher.

This paper uses the National Longitudinal Surveys (NLS), the Panel Study of Income Dynamics (PSID), and the General Social Survey (GSS) to measure the elasticity of family income on men's adult earnings in 1980 and the early 1990s. The study finds a large and statistically significant increase in the importance of family income over time when comparing cohorts in the NLS, a dataset that has not been previously used for this purpose. We also find a large but statistically insignificant increase when using the GSS. The PSID, however, shows a large but statistically insignificant decline in this parameter. The results imply that changes in the effect of family income did not operate through the channel of human capital. Results suggest that the rate of inheritability of income may have increased in recent decades, but this evidence is not yet definitive. Researchers, therefore, should exercise caution when generalizing about trends over time when using small samples from just one dataset such as the PSID.
Bibliography Citation
Levine, David I. and Bhashkar Mazumder. "Choosing the Right Parents: Changes in the Intergenerational Transmission of Inequality Between 1980 and the Early 1990s." Working Paper No. 2002-08, Federal Reserve Bank of Chicago, June 2002.
8. Levine, David I.
Mazumder, Bhashkar
The Growing Importance of Family: Evidence from Brothers' Earnings
Industrial Relations: A Journal of Economy and Society 46,1 (January 2007): 7-21.
Also: http://onlinelibrary.wiley.com/doi/10.1111/j.1468-232X.2007.00455.x/abstract
Cohort(s): NLSY79
Publisher: Institute of Industrial Relations, University of California, Berkeley
Keyword(s): Brothers; Earnings; Family Influences; Income; Income Distribution; Siblings; Wages

Permission to reprint the abstract has not been received from the publisher.

We examine between-brother correlation of earnings, family income, and wages from two cohorts of the National Longitudinal Surveys. Young brothers who entered the labor market in the 1970s had lower correlations of economic outcomes than did those who entered in the 1980s and early 1990s. Neither the rising brother correlation in education nor the rising return to schooling accounts for much of the increase in the brother correlation in earnings. These results suggest that family and community influences other than years of education that are shared by brothers have become increasingly important in determining economic outcomes. [ABSTRACT FROM AUTHOR]

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Bibliography Citation
Levine, David I. and Bhashkar Mazumder. "The Growing Importance of Family: Evidence from Brothers' Earnings." Industrial Relations: A Journal of Economy and Society 46,1 (January 2007): 7-21.
9. Mazumder, Bhashkar
Black-White Differences in Inter-Generational Economic Mobility in the U.S.
Working Paper Series No. CES-WP-11-40, U.S. Census Bureau Center for Economic Studies, December 2011.
Also: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1967466##
Cohort(s): NLSY79
Publisher: U.S. Department of Commerce
Keyword(s): Armed Forces Qualifications Test (AFQT); Disadvantaged, Economically; Income Distribution; Intergenerational Patterns/Transmission; Mobility; Mobility, Economic; Racial Differences; Wage Gap; Wealth

Traditional measures of intergenerational mobility such as the intergenerational elasticity are not useful for inferences concerning group differences in mobility with respect to the pooled income distribution. This paper uses transition probabilities and measures of “directional rank mobility” that can identify inter-racial differences in intergenerational mobility. The study uses two data sources including one that contains social security earnings for a large intergenerational sample. I find that recent cohorts of blacks are not only significantly less upwardly mobile but also significantly more downwardly mobile than whites. This implies a steady-state distribution in which there is no racial convergence in income. A descriptive analysis using covariates reveals that test scores in adolescence can explain much of the racial difference in both upward and downward mobility. Family structure can account for some of the racial gap in upward mobility but not downward mobility. Completed schooling and parental wealth also appear to account for some of the racial gaps in intergenerational mobility.
Bibliography Citation
Mazumder, Bhashkar. "Black-White Differences in Inter-Generational Economic Mobility in the U.S." Working Paper Series No. CES-WP-11-40, U.S. Census Bureau Center for Economic Studies, December 2011.
10. Mazumder, Bhashkar
Black-White Differences in Inter-Generational Economic Mobility in the U.S.
Economic Perspectives 38,1 (2014):.
Also: https://www.chicagofed.org/digital_assets/publications/economic_perspectives/2014/1Q2014_part1_mazumder.pdf
Cohort(s): NLSY79
Publisher: Federal Reserve Bank of Chicago
Keyword(s): Armed Forces Qualifications Test (AFQT); Disadvantaged, Economically; Income Distribution; Intergenerational Patterns/Transmission; Mobility, Economic; Racial Differences; Social Security; Survey of Income and Program Participation (SIPP); Wage Gap; Wealth

Permission to reprint the abstract has not been received from the publisher.

In this study, I attempt to advance our understanding along several dimensions. First, I use two data sets containing larger intergenerational samples than have been used in the previous literature. One of the data sets matches individuals in the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP) to administrative earnings records from the Social Security Administration (SSA). This matched data set provides many more years of data on parents’ earnings than most surveys and is likely to be less prone to measurement error, since it is derived from tax records. In addition, the SIPP contains data on key characteristics of the parents, such as wealth levels and marital history. The other data source I use is the U.S. Bureau of Labor Statistics’ National Longitudinal Survey of Youth (NLSY). In addition to containing a rich array of information as children transition from adolescence to adulthood, such as test scores and personality traits, the NLSY also measures total family income in both generations, giving it an advantage over the SIPP. Using a measure of economic status that includes the income of the spouse avoids selecting only women who participate in the labor market.
Bibliography Citation
Mazumder, Bhashkar. "Black-White Differences in Inter-Generational Economic Mobility in the U.S." Economic Perspectives 38,1 (2014):.
11. Mazumder, Bhashkar
Fortunate Sons: Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data
Review of Economics and Statistics 87,2 (May 2005): 235-255.
Also: http://www.jstor.org/stable/40042900
Cohort(s): NLSY79
Publisher: MIT Press
Keyword(s): Earnings; Family Income; Human Capital; Intergenerational Patterns/Transmission; Panel Study of Income Dynamics (PSID); Survey of Income and Program Participation (SIPP)

Previous studies, relying on short-term averages of fathers' earnings, have estimated the intergenerational elasticity (IGE) in earnings to be approximately 0.4. Due to persistent transitory fluctuations, these estimates have been biased down by approximately 30% or more. Using administrative data containing the earnings histories of parents and children, the IGE is estimated to be around 0.6. This suggests that the United States is substantially less mobile than previous research indicated. Estimates of intergenerational mobility are significantly lower for families with little or no wealth, offering empirical support for theoretical models that predict differences due to borrowing constraints.
Bibliography Citation
Mazumder, Bhashkar. "Fortunate Sons: Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data." Review of Economics and Statistics 87,2 (May 2005): 235-255.
12. Mazumder, Bhashkar
Sibling Similarities, Differences and Economic Inequality
Working Paper No. 2004-13, Federal Reserve Bank of Chicago, August 2004.
Also: http://www.chicagofed.org/publications/workingpapers/wp2004_13.pdf
Cohort(s): NLSY79
Publisher: Federal Reserve Bank of Chicago
Keyword(s): Brothers; Earnings; Intergenerational Patterns/Transmission; Mobility; Siblings

Permission to reprint the abstract has not been received from the publisher.

I use improved statistical approaches and much larger samples than previous studies to provide more robust estimates of the correlation in economic outcomes among siblings. A key finding is that more than half the variance in log wages among men is due to differences in family and community background. Slightly smaller estimates in the 0.45 to 0.5 range are found for earnings and family income. For women, the sibling correlation in family income is the same as that found for men. I estimate that the sibling correlation in years of schooling and AFQT test scores is higher than 0.6. In contrast, estimates for a variety of other non-economic outcomes (including physical attributes) are in the 0.2 to 0.4 range. Family and community influences are particularly important for those who start at the bottom of the income distribution. An analysis of the variance in outcomes within families, by quartiles of parent income provides a new set of facts that should inform theoretical models of family resource allocation. I also find that a large portion of the sibling correlation in some economic outcomes can be explained by observable characteristics.
Bibliography Citation
Mazumder, Bhashkar. "Sibling Similarities, Differences and Economic Inequality." Working Paper No. 2004-13, Federal Reserve Bank of Chicago, August 2004.
13. Mazumder, Bhashkar
Upward Intergenerational Economic Mobility in the United States
Economic Mobility Project, the Pew Charitable Trust, May 2008.
Also: http://www.economicmobility.org/reports_and_research/other?id=0004
Cohort(s): NLSY79
Publisher: Pew Charitable Trust
Keyword(s): Disadvantaged, Economically; Income Distribution; Intergenerational Patterns/Transmission; Mobility, Economic; Racial Differences; Wage Gap

Permission to reprint the abstract has not been received from the publisher.

In an era of rising income inequality, understanding the extent of economic mobility from one generation to the next in America has never been more important. Only if there is considerable opportunity for children from disadvantaged backgrounds to move beyond their parents' place in the income distribution, may economic inequality be viewed as tolerable. This report introduces two new and flexible measures to examine upward relative mobility--the extent to which children can rise above their parents' position when compared to their peers. The report also explores various factors that might account for racial differences in upward economic mobility rates.
Bibliography Citation
Mazumder, Bhashkar. "Upward Intergenerational Economic Mobility in the United States." Economic Mobility Project, the Pew Charitable Trust, May 2008.
14. Mazumder, Bhashkar
What Similarities Between Siblings Tell Us About Inequality in the U.S.
Chicago Federal Letter 209,1 (December 2004): 1-5
Cohort(s): NLSY79
Publisher: Federal Reserve Bank of Chicago
Keyword(s): Demography; Family Influences; Incarceration/Jail; Income; Siblings

Permission to reprint the abstract has not been received from the publisher.

Discusses family and community influences that lead to earnings inequality. Number of sibling pairs included in the sample of the National Longitudinal Survey of Youth; Estimated sibling correlation in annual earnings for men; Percentage of the correlation between brothers accounted for the time spent in jail; Psychological measures that have a non-negligible effect on the sibling correlation.

The author finds that about half of earnings inequality in the U.S. can be explained by family and community influences during childhood. He also finds that these influences have become more important in recent decades. Copyright: Federal Reserve Bank of Chicago: 2004

Bibliography Citation
Mazumder, Bhashkar. "What Similarities Between Siblings Tell Us About Inequality in the U.S. ." Chicago Federal Letter 209,1 (December 2004): 1-5.
15. Mazumder, Bhashkar
Levine, David I.
Growing Importance of Family and Community: An Analysis of Changes in the Sibling Correlation in Earnings
Working Paper No. 2003-24, Federal Reserve Bank of Chicago, November 2003.
Also: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=483023
Cohort(s): NLSY79, Young Men
Publisher: Federal Reserve Bank of Chicago
Keyword(s): Brothers; Data Quality/Consistency; Earnings; High School Dropouts; Income; Intergenerational Patterns/Transmission; Mobility; Panel Study of Income Dynamics (PSID); Siblings

Permission to reprint the abstract has not been received from the publisher.

This study presents evidence that the correlation in brothers' earnings has risen in recent decades. We use two distinct cohorts of young men from the National Longitudinal Surveys and estimate that the correlation in earnings between brothers rose from 0.26 to 0.45. This suggests that family and community influences shared by siblings have become increasingly important in determining economic outcomes. We find that neither the correlation in years of schooling nor the rising return to schooling accounts for this increase. We also argue that the PSID is not an appropriate dataset for analyzing changes over time because of its sampling design, small sample of siblings, and high attrition rate.
Bibliography Citation
Mazumder, Bhashkar and David I. Levine. "Growing Importance of Family and Community: An Analysis of Changes in the Sibling Correlation in Earnings." Working Paper No. 2003-24, Federal Reserve Bank of Chicago, November 2003.