This paper presents new evidence on intergenerational mobility in the top of the income
and earnings distribution. Using a large dataset of matched father-son pairs in Sweden, we
find that intergenerational transmission is very strong in the top, more so for income than
for earnings. In the extreme top (top 0.1 percent) income transmission is remarkable with
an IG elasticity around 0.9. We also study potential transmission mechanisms and find that
sons’ IQ, non-cognitive skills and education are all unlikely channels in explaining the
strong transmission. Within the top percentile, increases in fathers’ income are, if anything,
negatively associated with these variables. Wealth, on the other hand, has a significantly
positive association. Our results suggest that Sweden, known for having relatively high intergenerational
mobility in general, is a society where transmission remains strong in the
very top of the distribution and that wealth is the most likely channel.
Presented by:
Daniel Waldenstrom (University of Uppsala)
Date & time:
November 14, 2011 4:00 pm
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