Alike in many ways: Intergenerational and sibling correlations of brothers' earnings

Arbeitspapier

We model the correlations of brothers' life-cycle earnings separating for the first time the effect of paternal earnings from additional residual sibling effects. We identify the two effects by analysing sibling correlations and intergenerational correlations jointly within a unified framework. Our multi-person model of earnings dynamics distinguishes permanent earnings from transitory - serially correlated - shocks, allows for life-cycle effects and nests the models of previous research that have focussed either on intergenerational or sibling correlations. Using data on the Danish population of father/first-son/second-son triplets we find that sibling effects explain between one fourth and one half of inequality in life-cycle earnings, and largely account for individual differences in earnings growth. Intergenerational associations account for a considerable share of overall sibling correlations, between 30 and 60 per cent from youth to maturity. We also find that transitory shocks are correlated across family members, in particular between brothers. Extensions of the model show a distinctive effect of mothers' human capital on top of fathers' earnings and no evidence of differential intergenerational transmission between brothers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 6987

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Job, Occupational, and Intergenerational Mobility; Promotion
• Subject: intergenerational transmission ; sibling correlations ; life-cycle earnings ; Lebenseinkommen ; Familiensoziologie ; Generationenbeziehungen ; Schätzung ; Dänemark

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bingley, Paul ; Cappellari, Lorenzo
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/67279
• Last update: 10.03.2025, 11:43 AM CET