Sources of Measurement Errors in Earnings Data: New Estimates of Intergenerational Elasticities

Øivind Nilsen, Kjell Vaage, Arild Aakvik and Karl Jacobsen ()
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Karl Jacobsen: Statistics Norway, Research Department, Postal: P.O.Box 8131 Dep., N-0033 Oslo, Norway

No 04/08, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: Using intergenerational data with a substantial part of the life-cycle earnings of children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility in Norway. Extending the length of the fathers’ earnings windows from 5 to 30 years increases the estimated elasticities. Varying the age of father at observation has the opposite effect. Our findings indicate that intergenerational earnings mobility may have been strongly overstated in many earlier studies with shorter earnings histories. Biases in the estimated elasticities appear to be related to age and/or life-cycle measurement errors more than persistency in the transitory innovations.

Keywords: Intergenerational mobility; measurement error. (search for similar items in EconPapers)
JEL-codes: C23 J62 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2008-04-23
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