Assessing Intergenerational Earnings Persistence among German Workers

Eisenhauer, Philipp; Pfeiffer, Friedhelm

doi:10.2139/ssrn.1291061

Cited by 9 publications

(7 citation statements)

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“…Results from existing single country studies place Germany somewhere between the U.S. and Scandinavian countries (Solon, ; Corak, ; Black and Devereux, ; Corak, ). Eisenhauer and Pfeiffer () estimate an IGE of 0.28, which is in line with further existing results on Germany (Wiegand, ; Schnitzlein, ; Yuksel, ). The consensus estimate in the literature for U.S. IGE lies between 0.4 and 0.5 (Corak, ).…”

Section: Introductionsupporting

confidence: 88%

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A New Look at Intergenerational Mobility in Germany Compared to the U.S

Schnitzlein

2015

Review of Income and Wealth

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in SOEPpapers on Multidisciplinary Panel Data Research at DIW BerlinThis series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science.The decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly.Any opinions expressed in this series are those of the author(s) and not those of DIW Berlin.Research disseminated by DIW Berlin may include views on public policy issues, but the institute itself takes no institutional policy positions. AbstractMotivated by contradictory evidence on intergenerational mobility in Germany, I present a cross-country comparison of Germany and the US, reassessing the question of whether intergenerational mobility is higher in Germany than the US. I can reproduce the standard result from the literature, which states that the German intergenerational elasticity estimates are lower than those for the US. However, based on highly comparable data, even a reasonable degree of variation in the sampling rules leads to similar estimates in both countries. I find no evidence for nonlinearities along the fathers' earnings distribution. In contrast, the analysis shows that mobility is higher for the sons at the lowest quartile of the sons' earnings distribution in both countries. In Germany this result is mainly driven by a high downward mobility of sons with fathers in the upper middle part of the earnings distribution. The corresponding pattern is clearly less pronounced in the US.

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Section: Introductionsupporting

confidence: 88%

“…The slightly higher German IGE estimate compared, for example, to Eisenhauer and Pfeiffer (), is likely to be due to the more mature sample of sons and the higher number of earnings observations in the fathers' average earnings measure.…”

mentioning

confidence: 82%

A New Look at Intergenerational Mobility in Germany Compared to the U.S

Schnitzlein

2015

Review of Income and Wealth

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“…Annual earnings, multiyear average (at least over five years) when fathers were up to 60 years old 0.235 Eisenhauer and Pfeiffer (2008) 1984-2006 Monthly earnings when sons were between 30 and 50 years old…”

Section: Discussionmentioning

confidence: 99%

Estimation of intergenerational mobility in small samples: evidence from German survey data

Kyzyma

Groh-Samberg

2020

Soc Indic Res

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Using data from the German socio-economic panel, this paper provides new evidence on intergenerational mobility in Germany by focusing on intergenerational association in ranks—i.e. positions, which parents and children occupy in their respective income distributions. We find that the association of children’s ranks with ranks of their fathers is about 0.242 for individual labor earnings and it is higher for sons than for daughters. It is also higher in East Germany compared to West Germany. The results further show that rank-based measures of mobility are less sensitive than conventional measures of intergenerational income elasticity to different methodological and sample specification choices, such as the stages of the life cycle when incomes of children and parents are measured, the number of years for which incomes are considered, the treatment of zero values in income variables and the choice of annual versus hourly earnings. Moreover, they are more robust for sub-group comparisons of intergenerational mobility (e.g. across gender and region). This evidence suggests that, similarly to large administrative datasets, rank-based measures of intergenerational mobility perform better than elasticity-based measures in small samples based on survey data.

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“…how the wage of the son is related to the wage of his father (see e.g. Solon (1992) for the U.S. and Eisenhauer and Pfeiffer (2008) for Germany). These studies report a wage elasticity from about 0.3 in Germany and about 0.4 in the U.S.…”

Section: Introductionmentioning

confidence: 99%

Decreasing Wage Mobility in Germany

Gernandt

2009

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp09044.pdf Non-technical summaryCross-section inequality increased in the last decade in Germany. Wage mobility can at least partly offset the increase in cross-section inequality and thus leads to a better understanding of inequality and poverty in a society. If wages are immobile, rising cross-section inequality is associated with a rising inequality of lifetime earnings. On the other hand, the extreme case of total mobility would resemble a lottery re-starting at the beginning of every time period and repositioning the individual at random in the wage distribution. The study at hand analyses the development of the wage mobility in Germany over the last 25 years.The data base of this empirical study is the German Socio-economic Panel (SOEP) for the time period 1984 to 2007, focusing on West Germans. The SOEP is a representative panel data set, which surveys about 11,000 households with 20,000 persons. Wage mobility in terms of the paper at hand is measured by the degree to which ranks are reversed over a 4-year time period where each rank represents one of 100 percentiles of the overall hourly wage distribution. The goal is to look at the individual turnover of persons within the wage distribution at the micro level to identify properties affecting wage mobility.The main findings show that wage mobility has decreased over time, while inequality has increased. Mobility is highest in the middle section of the distribution and highest for persons aged 30-39 years. Individual upgrades in the wage distribution are more likely to occur for university graduates, younger workers, employees in larger firms and for persons working in the public sector, as well as for white-collar workers and less likely for persons who faced an unemployment period in the time of observation. Wages are more volatile in the low-wage sector and for individuals moving downwards in the wage distribution. Das Wichtigste in KürzeSeit Mitte der 1990er Jahre ist die Lohnungleichheit in Deutschland im Querschnitt gestiegen.

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Assessing Intergenerational Earnings Persistence among German Workers

Abstract: In this study we assess the relationship between father and son earnings among (West) German Workers. To reduce the lifecycle and attenuation bias a novel sampling procedure is developed and applied to the German

Cited by 9 publications

References 39 publications

A New Look at Intergenerational Mobility in Germany Compared to the U.S

A New Look at Intergenerational Mobility in Germany Compared to the U.S

Estimation of intergenerational mobility in small samples: evidence from German survey data

Decreasing Wage Mobility in Germany

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