Intergenerational Associations in Income Changes Over the Life Course

• In Event: 2248 - Social Inequality and Stratification: Analytical Advances and Empirical Applications

Abstract

There is a long history of studying intergenerational mobility using mobility tables or transition matrices. One potential limitation of this approach is that the number of income or social classes in each generation is predetermined, and individuals are assumed to stay within the same social class over the life course. We propose an alternative, group-based trajectory approach to characterize income dynamics over individuals’ working lives and examine the association in income trajectories between generations. We assign individuals into several distinct trajectory groups, as compared to the conventional approach that analyzes income strata based on quintiles or other percentile-based measures. We then estimate the trajectory memberships of parents and offspring and their interdependence in the form of the mobility transition matrices. Using data from the Panel Study of Income Dynamics (1968-2013), our results show significant differences in intergenerational income associations among groups that have experienced divergent income trajectories over the life cycle. The results suggest that economic statuses of parents and offspring are associated not only in income levels—as most previous research using intergenerational income mobility matrix has shown—but, more strongly, in the ways that income evolves as the career trajectory of each generation unfolds. Educational attainment explains away the intergenerational associations in income trajectory groups between fathers and daughters, but not between fathers and sons. We discuss the implications of our results for policies on designing social security benefits and on promoting intergenerational mobility.

Authors

• Xi Song, University of Chicago

• Emma Zang, Duke University

• Kenneth C. Land, Duke University