The political economy of intergenerational income mobility

Arbeitspapier

The intergenerational elasticity of income is considered one of the best measures of the degree to which a society gives equal opportunity to its members. While much research has been devoted to measuring this reduced-form parameter, less is known about its underlying structural determinants. Using a model with exogenous talent endowments, endogenous parental investment in children and endogenous redistributive institutions, we identify the structural parameters that govern the intergenerational elasticity of income. The model clarifies how the interaction between private and collective decisions determines the equilibrium level of social mobility. Two societies with similar economic and biological fundamentals may have vastly different degrees of intergenerational mobility depending on their political institutions. We offer empirical evidence in line with the predictions of the model. We conclude that international comparisons of intergenerational elasticity of income are not particularly informative about fairness without taking into account differences in politico-economic institutions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 4767

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Job, Occupational, and Intergenerational Mobility; Promotion ; Mobility, Unemployment, and Vacancies: Public Policy ; Capitalist Systems: Political Economy
• Subject: Intergenerational mobility ; public education ; political institutions ; Einkommen ; Soziale Mobilität ; Intergenerational Mobility ; Bildungschancen ; Bildungspolitik ; Public Choice ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ichino, Andrea ; Karabarbounis, Loukas ; Moretti, Enrico
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/36194
• Last update: 10.03.2025, 11:44 AM CET