The Intergenerational Mobility of Income: A Study Applied to the Spanish Case (2005–2011)

Intergenerational income mobility has attracted the interest of many economists for—among other reasons—its role as a mechanism for reducing inequalities and achieving equal opportunities. In this paper, we analyse the intergenerational mobility of income in Spain in the years 2005 and 2011, located at different phases of the economic cycle. We use proxy variables (the economic situation of the household during the adolescence of the informant and the educational level achieved by parents) to study intergenerational income mobility, because there are not extant surveys with income information from parents and their descendants when they are part of a different household. With these variables, we try to verify the existence and degree of mobility by analysing different methodologies. The results suggest the existence of mobility in the two studied years, although a trend towards a reduction in intergenerational mobility is confirmed, already detected by other authors.

Estimating intergenerational income mobility on sub-optimal data: a machine learning approach

Much of the global evidence on intergenerational income mobility is based on sub-optimal data. In particular, two-stage techniques are widely used to impute parental incomes for analyses of lower-income countries and for estimating long-run trends across multiple generations and historical periods. We propose applying machine learning methods to improve the reliability and comparability of such estimates. Supervised learning algorithms minimize the out-of-sample prediction error in the parental income imputation and provide an objective criterion for choosing across different specifications of the first-stage equation. We use our approach on data from the United States and South Africa to show that under common conditions it can limit the bias generally associated to mobility estimates based on imputed parental income.

How Robust are Estimates of Intergenerational Income Mobility?

Rising inequalities in rich countries have led to concerns that the economic ladder is getting harder to climb. It is well established that intergenerational income mobility is lower in countries with high inequality, but research on trends in mobility finds conflicting results. Motivated by this uncertainty, we ask: how important are choices of specification for levels and trends in intergenerational income associations? We use Swedish data on cohorts born 1958–1977 and their parents. Varying how, when and for whom income is measured, we estimate 1,658,880 different associations (82,944 specifications across 20 cohorts). Our results reveal that model choice is an underrecognized source of variation in intergenerational mobility research. The most consistent contributor to trends is the advancement of women in the labor market, which leads to increased persistence in women’s earnings and the family income of both men and women. Depending on specification, it is possible to conclude that income mobility is increasing, decreasing, or remaining flat. Despite variability, our results are broadly consistent with the received view that the level of mobility in Sweden is high in a comparative perspective.