Aaronson, Daniel, and Bhashkar Mazumder. 2008. “Intergenerational Economic Mobility in the United States, 1940 to 2000.” Journal of Human Resources 43(1): 139–172.
We estimate trends in intergenerational economic mobility by matching men in the Census to synthetic parents in the prior generation. We find that mobility increased from 1950 to 1980 but has declined sharply since 1980. While our estimator places greater weight on location effects than the standard intergenerational coefficient, the size of the bias appears to be small. Our preferred results suggest that earnings are regressing to the mean more slowly now than at any time since World War II, causing economic differences between families to become more persistent. However, current rates of positional mobility appear historically normal.
Daniel Aaronson is an economic advisor in the economic research department at the Federal Reserve Bank of Chicago. Bhashkar Mazumder is a senior economist in the economic research department of the Federal Reserve Bank of Chicago and executive director of the Chicago Census Research Data Center. The authors thank Merritt Lyon for excellent research assistance. They are especially thankful to Tom Hertz who offered several very helpful suggestions. They also acknowledge Anders Björklund, Kristin Butcher, John DiNardo, Greg Duncan, David Levine, Bruce Meyer, Gary Solon, Dan Sullivan, Chris Taber, and seminar participants at several conferences and universities. The views presented here are not necessarily those of the Federal Reserve Bank of Chicago or the Federal Reserve System. The data used in this article can be obtained beginning August 2008 through July 2011 from Bhashkar Mazumder, Research Department, Federal Reserve Bank of Chicago, 230 S. LaSalle St, Chicago, IL 60604, bmazumder@frbchi.org.