In the Name of the Son (and the Daughter): Intergenerational Mobility in the United States, 1850-1930

Abstract

This paper provides a new perspective on intergenerational mobility in the United States in the late 19th and early 20th centuries. We devise an empirical strategy that allows to calculate intergenerational elasticities between fathers and children of both sexes. The key insight of our approach is that the information about socio-economic status conveyed by first names can be used to create a pseudo-link not only between fathers and sons, but also between fathers and daughters. The latter is typically not possible with historical data.We find that the father-son elasticity in economic status grows throughout the sample period. Intergenerational elasticities for daughters follow a broadly similar trend, but with some differences in timing. We argue that most of the increase in the intergenerational elasticity estimate in the early part of the 20th Century can be accounted for by the vast regional disparities in economic development, with increasing returns to human capital contributing to explain the residual. Other mechanisms such as changes in fertility, migration, and investment in public schooling, appear to have had only a minor role in explaining the trends.

Geographic Effects on Intergenerational Income Mobility

“…One explanation for the small share of variance explained is provided by Olivetti and Paserman (2013), who argue that much of the intergenerational association of income stems from unmeasured regional characteristics. Indeed the economic geography literature contains a number of studies showing geographic effects on migration and income growth: housing price appreciation affects the decision and ability to migrate (Ermisch and Washbrook 2012); labor demand and income growth-which manifest themselves in housing prices-affect the attractiveness of a place to migrants (Pack 1973); and dense expensive cities often "select" for high-skilled workers by concentrating on high-skilled industries (Combes, Duranton, and Gobillon 2008;Détang-Dessendre, Drapier, and Jayet 2004).…”

The Decline in Intergenerational Mobility After 1980

“…Aaronson and Mazumder (2008) do find evidence of greater mobility in the decades prior to 1980. However, Aaronson and Mazumder (2008) do not use intergenerationally linked samples and instead rely on a more indirect "synthetic cohort" 1 Studies of earlier historical periods (Long and Ferrie, 2013;Olivetti and Paserman, 2015) suggest that intergenerational mobility fell early in the 20th century but those studies do not examine trends in more recent decades. approach that links groups of parents and children across Decennial Censuses by state and year of birth of the child.…”

Regional Growth and Regional Decline

“…It may be that human capital is relatively costly to acquire in poorer regions; since children cannot choose where to locate, regional disparities would contribute to differences in life chances and inequality. Olivetti and Paserman (2013) argue that, given the tendency for children to remain in the same region as their parents, regional disparities help to explain the decline in social mobility seen in the US in the first part of the twentieth century. Durlauf (2012) discusses the possible relevance of poverty trap ideas at the regional level.…”