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Source: International Association for Research in Income and Wealth (I.A.R.I.W.)
Resulting in 1 citation.
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Grawe, Nathan D. |
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Life Cycle Bias in the Estimation of Intergenerational Earnings Persistence Presented: Cork, Ireland, The International Association for Research in Income and Wealth General Conference, August 2004. Also: http://www.iariw.org/papers/2004/grawe.pdf Cohort(s): Older Men, Young Men Publisher: International Association for Research in Income and Wealth (I.A.R.I.W.) Keyword(s): Canadian Intergenerational Income Data (IID); German Socio-Economic Panel (GSOEP); Germany, German; Mobility; Panel Study of Income Dynamics (PSID) Using data from the National Longitudinal Survey, the German Socio-Economic Panel, the Canadian Intergenerational Income Data, and the Panel Study of Income Dynamics; this study finds a strong association between estimated intergenerational earnings elasticities and the age at which fathers and sons are observed. In all four data sets the age-elasticity relationship (which is positive for sons and negative for fathers) is especially strong among fathers; estimates are cut in half as the fathers' ages at observation increase by fewer than fifteen years. These effects are consistent with either increasing transitory earnings variance (and so greater attenuation bias) or increasing earnings variance over the life cycle predicted by the human capital investment models of Mincer and Ben-Porath. Furthermore, an examination of published estimates of intergenerational earnings elasticities shows that controls for the average age of fathers explain about one-third of the variance among estimates. These results impact our interpretation of empirical work which attempts to differentiate between the importance of parent income when children are young as opposed to when children are older, work which has been used to draw conclusions about credit constraints and early childhood education programs. |
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Bibliography Citation
Grawe, Nathan D. "Life Cycle Bias in the Estimation of Intergenerational Earnings Persistence." Presented: Cork, Ireland, The International Association for Research in Income and Wealth General Conference, August 2004. |