Journal of Labor Economics Vol. 44 No. 3 2026

Consumption and Income Inequality across Generations

Giovanni Gallipoli¹; Hamish Low²; Aruni Mitra³

¹ University of British Columbia, Centre for Economic Policy Research, and Human Capital and Economic Opportunity Global Working Group · ² Federal Reserve Bank of Chicago, Centre for Economic Policy Research, and Institute for Fiscal Studies · ³ University of Manchester

Abstract

We characterize the joint evolution of cross-sectional inequality in earnings, other sources of income and consumption across generations in the U.S. To account for cross-sectional dispersion, we estimate a model of intergenerational persistence and separately identify the influences of parental factors and of idiosyncratic life-cycle components. We find evidence of family persistence in earnings, consumption and saving behaviours, and marital sorting patterns. However, the quantitative contribution of idiosyncratic heterogeneity to cross-sectional inequality is significantly larger than parental effects. Our estimates imply that intergenerational persistence is not high enough to induce further large increases in inequality over time and across generations.

DOI

10.1086/733051

Volume

44

Issue

3

Pages

967-1008

Language

en

Sources

openalex crossref

Cite

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