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.

The literature on intergenerational income mobility uses a diverse set of measures and there is limited knowledge about whether these measures provide similar information and yield similar conclusions. We provide a framework to highlight the key concepts and properties of the different estimators. We then show how these measures relate to one another empirically. Our main analysis uses income tax data from Australia to produce a comprehensive set of empirical estimates for each of 19 different mobility measures at both the national and regional levels. We supplement this analysis with other data that uses either within- or between-country variation in mobility measures. A key finding is that there is a clear distinction between relative and absolute measures both conceptually and empirically. A region may be high with respect to absolute mobility but could be low with respect to relative mobility. However, within broad categories, the different mobility measures tend to be highly correlated. For rank-based estimators, we highlight the importance of how the choice of the distribution used for calculating ranks can play a critical role in determining its properties as well as affect empirical findings. These patterns of results are important for policymakers whose local economy might fare well according to some mobility indicators but not others.

The 1918 Influenza Pandemic and Subsequent Health Outcomes: An Analysis of SIPP Data by Douglas Almond and Bhashkar Mazumder. Published in volume 95, issue 2, pages 258-262 of American Economic Review, May 2005

The black-white gap in schooling among southern-born men narrowed sharply between the world wars. From 1914 to 1931, nearly 5,000 schools were constructed as part of the Rosenwald Rural Schools Initiative. Using census data and World War II records, we find that the Rosenwald program accounts for a sizable portion of the educational gains of rural southern blacks. We find significant effects on school attendance, literacy, years of schooling, cognitive test scores, and northern migration. The gains are highest in the most disadvantaged counties, suggesting that schooling treatments have the largest impact among those with limited access to education.

Relative intergenerational mobility declined for cohorts born around 1960 compared to those born around 1950. The former entered the labor market after the rise in inequality around 1980, while the latter entered the labor market earlier. We show that the rank-rank slope rose from 0.25 to 0.36 and the intergenerational elasticity increased from 0.28 to 0.45. These increases are more pronounced for men than for women. Increases in returns to schooling and in the gradient in the likelihood of marriage by parent income are contributors to increased intergenerational persistence.

We estimate the long-run effects of the 1930s Home Owners Loan Corporation (HOLC) redlining maps by linking children in the full count 1940 census to 1) the universe of Internal Revenue Service (IRS) tax data in 1974 and 1979 and 2) the long form 2000 census. We use two identification strategies to estimate the potential long-run effects of differential access to credit along HOLC boundaries. The first strategy compares cross-boundary differences along HOLC boundaries to a comparison group of boundaries that had statistically similar preexisting differences as the actual boundaries. A second approach only uses boundaries that were least likely to have been chosen by the HOLC based on our statistical model. We find that children living on the lower-graded side of HOLC boundaries had significantly lower levels of educational attainment, reduced income in adulthood, and lived in neighborhoods during adulthood characterized by lower educational attainment, higher poverty rates, and higher rates of single-parent households.

By allowing for an extensive margin in the standard quantity-quality model, we generate new insights into fertility transitions. We test the model on Southern black women affected by a large-scale school construction program. Consistent with our model, women facing improved schooling opportunities for their children were more likely to have at least one child but chose to have smaller families overall. By contrast, women who themselves obtained more schooling due to the program delayed childbearing along both the extensive and intensive margins and entered higher quality occupations, consistent with education raising opportunity costs of child rearing.

How does school quality affect health amid multiple behavioral responses? The Rosenwald schools transformed school quality for rural southern African Americans in the early 1900s. Research shows that the schools made black migration northward more likely and that the Great Migration shortened life expectancy for these migrants. Besides the hypothesized health-enhancing effects of school quality, negative health effects might also occur through migration. We disentangle behavioral mechanisms and find complete exposure to the Rosenwald schools increased life expectancy by 2–3 months; a more naive approach finds no relationship. Results are robust to heterogeneous treatment effects and various measurement issues.