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How Much of Intergenerational Immobility Can be Attributed to Differences in Childhood Circumstances?

Rafael Carranza (University of Oxford, UK)

Mobility and Inequality Trends

ISBN: 978-1-80382-902-9, eISBN: 978-1-80382-901-2

Publication date: 25 January 2023


Can an estimate of the intergenerational elasticity (IGE) be interpreted as a measure of inequality of opportunity (IOp)? If parental income is the only childhood circumstance, then the answer is yes. However, parental income is one of many potential circumstances that can shape IOp. These circumstances can influence the offspring’s income indirectly – by influencing parental income – or directly, bypassing the IGE altogether. I develop a model to decompose the interaction between childhood circumstances, parental income and offspring income. Using the Panel Study of Income Dynamics for the United States, I find that childhood circumstances account for 55% of the IGE for individual earnings and 53% for family income, with parental education explaining over a third of those shares. Furthermore, the IGE misses a large part of the influence of circumstances: only 45% of the influence of parental education on the offspring’s income goes through parental income (36% for earnings).




I am grateful to Chico Ferreira, Stephen Jenkins, Berkay Özcan, Xavi Ramos, and an anonymous reviewer for their useful comments. I would also like to acknowledge the comments offered by the participants of the Workshop on Social Mobility and Economic Performance and ECINEQ 2021.

This research has been supported by the Centre for Social Conflict and Cohesion Studies (ANID/FONDAP/15130009), the Becas Chile programme from ANID (ANID/PFCHA/DOCTORADO BECAS CHILE/2016 – 72170193), and European Research Council Synergy Grant 75446 for project DINA – Towards a System of Distributional National Accounts.


Carranza, R. (2023), "How Much of Intergenerational Immobility Can be Attributed to Differences in Childhood Circumstances?", Bandyopadhyay, S. and Rodríguez, J.G. (Ed.) Mobility and Inequality Trends (Research on Economic Inequality, Vol. 30), Emerald Publishing Limited, Leeds, pp. 65-108.



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Copyright © 2023 Rafael Carranza