Two-Sample Two-Stage Least Squares (TSTSLS) Estimates of Earnings Mobility: How Consistent are They?

Jerrim, John; Choi, Álvaro; Rodríguez, Rosa Fermina Simancas

doi:10.2139/ssrn.2535954

Cited by 122 publications

(44 citation statements)

References 75 publications

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“…The TSTSLS method—developed starting from the two‐sample instrumental variables estimation (Angrist and Krueger, )—allows researcher to overcome this limit (Bjorklund and Jäntti, ; see Jerrim et al , , for a review of the studies carried out by using the TSTSLS approach). This method exploits two separate samples observed in different time periods: i) a sample of adult children, where their incomes and the socio‐economic characteristics of their parents (e.g.…”

Section: How To Estimate the Intergenerational Income Association: Emmentioning

confidence: 99%

Intergenerational Earnings Inequality: New Evidence From Italy

Barbieri

Bloise

Raitano

2019

Review of Income and Wealth

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Using an innovative dataset built by merging survey and administrative data, we provide new estimates of intergenerational earnings' inequality between fathers and sons in Italy, extending previous evidence in several directions. We rely on the TSTSLS method to predict fathers' earnings and compute intergenerational elasticities and imputed rank-rank slopes, trying to reduce estimation biases. Confirming previous evidence, we find that Italy is characterized by a high intergenerational inequality in crosscountry comparison. Extending previous analyses, we show that the intergenerational association increases when sons at older ages and multi-annual averages of pseudo-fathers' and sons' earnings are considered. We also find that the intergenerational persistence differs across geographical macro-areas and is high also for daughters, especially when family earnings are considered. Furthermore, estimates where possible mediating factors of the parental influence are included among the covariates show that a high intergenerational association persists when sons' education and occupation are controlled for.JEL Codes: J24, J31, J62

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Section: How To Estimate the Intergenerational Income Association: Emmentioning

confidence: 99%

Intergenerational Earnings Inequality: New Evidence From Italy

Barbieri

Bloise

Raitano

2019

Review of Income and Wealth

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“…This is used by Dearden, Machin and Reed (1997) for the UK, who use the 1958 birth cohort with sons' earnings measured at age 33 and suggest that attenuation bias is substantial enough to move the estimated intergenerational elasticity (IGE) from 0.24 to the region of 0.55, although the authors note that this is likely to be an upper bound. This approach has similarities with the two-sample two-stage technique, when family income or fathers' earnings are unobserved but other characteristics such as parental education and occupation are (Ermisch and Nicoletti, 2007;Jerrim, Choi and Rodriguez, 2014). Jenkins (1987) drew attention to the second issue of lifecycle bias, based on the generalized errors in variables model by exploring the relationship between point in time and lifetime earnings.…”

Section: Introductionmentioning

confidence: 99%

Moving Towards Estimating Sons' Lifetime Intergenerational Economic Mobility in the UK

Gregg

Macmillan²,

Vittori

2016

Oxf Bull Econ Stat

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Estimates of intergenerational economic mobility that use point in time measures of income and earnings suffer from lifecycle and attenuation bias. They also suffer from sample selection issues and further bias driven by spells out of work. We consider these issues together for UK data, the National Child Development Study and British Cohort Study, for the first time. When all three biases are considered, our best estimate of lifetime intergenerational economic persistence in the UK is 0.43 for children born in 1970. Whilst we argue that this is the best available estimate to date, we discuss why there is good reason to believe that this is still a lower bound, owing to residual attenuation bias.

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“…1 The reliability of such imputation is open to serious question. The choice and the measurement of imputer variables and the particular imputation models used can lead to wide variation in estimates of earnings mobility, whether based on the IEE or otherwise (Jerrim, Choi and Simancas, 2016).…”

Section: Datamentioning

confidence: 99%

Social Inequality and Social Mobility: Is there an Inverse Relation?

Bukodi¹,

Goldthorpe²

2018

Preprint

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While accepting that an inverse relation of some kind exists between inequality and mobility, we begin by reviewing criticisms of recent attempts by economists to express this relation in terms of income inequality and mobility – the ‘Great Gatsby Curve’. This appears to be neither empirically secure nor theoretically well-grounded. Using a newly constructed European dataset, we then aim to show that if mobility is treated in terms of social class, rather than income, an inverse relation with social inequality can be suggested that is more complex but that has a stronger empirical and a more coherent theoretical basis. Our results indicate that European countries are best seen not as displaying entirely continuous variation in their relative rates of class mobility, but rather as falling into a number of comparatively high and low fluidity groups. We offer an interpretation of these results that starts out from the proposition that within societies with a capitalist market economy, a nuclear family system and a liberal democratic polity, some limit exists to the extent to which relative mobility rates can be brought towards equality. Variation in such rates can then be understood in terms of how close nations are to this limit, and whether they are moving towards or receding from it, but with different forms of inequality impacting on their fluidity trajectories in differing ways.

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Two-Sample Two-Stage Least Squares (TSTSLS) Estimates of Earnings Mobility: How Consistent are They?

Cited by 122 publications

References 75 publications

Intergenerational Earnings Inequality: New Evidence From Italy

Intergenerational Earnings Inequality: New Evidence From Italy

Moving Towards Estimating Sons' Lifetime Intergenerational Economic Mobility in the UK

Social Inequality and Social Mobility: Is there an Inverse Relation?

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