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The Decline in Intergenerational Mobility After 1980

System Working Paper 17-21 | Published July 6, 2017

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Authors

Jonathan Davis University of Chicago

Bhashkar Mazumder Federal Reserve Bank of Chicago and University of Bergen

The Decline in Intergenerational Mobility After 1980

Abstract

We demonstrate that intergenerational mobility declined sharply for cohorts born between 1957 and 1964 compared to those born between 1942 and 1953. The former entered the labor market largely after the large rise in inequality that occurred around 1980 while the latter entered the labor market before this inflection point. We show that the rank-rank slope rose from 0.27 to 0.4 and the IGE rose from 0.35 to 0.51. The share of children whose income exceeds that of their parents fell by about 3 percentage points. These findings suggest that relative mobility fell by substantially more than absolute mobility.