A Nonparametric Analysis of Black-White Differences in Intergenerational Income Mobility in the United States

By Debopam Bhattacharya, B. Mazumder. 2010

163 citations recorded by the source corpus.

This paper concerns the problem of inferring the effects of covariates on intergenerational income mobility, i.e. on the relationship between the incomes of parents and future earnings of their children. We focus on two different measures of mobility - (i) traditional transition probability of movement across income quantiles over generations and (ii) a new direct measure of upward mobility, viz. the probability that an adult child's relative position exceeds that of the parents. We estimate the effect of possibly continuously distributed covariates from data using nonparametric regression and average derivatives and derive the distribution theory for these measures. The analytical novelty in the derivation is that the dependent variables involve nonsmooth functions of estimated components - marginal quantiles for transition probabilities and relative ranks for upward mobility - thus necessitating nontrivial modifications of standard nonparametric regression theory. We use these methods on US data from the National Longitudinal Survey of Youth to study black-white differences in intergenerational mobility, a topic which has received scant attention in the literature. We document that whites experience greater intergenerational mobility than blacks. Estimates of conditional mobility using nonparametric regression reveal that most of the interracial mobility gap can be accounted for by differences in cognitive skills during adolescence. The methods developed here have wider applicability to estimation of nonparametric regression and average derivatives where the dependent variable either involves a preliminary finite-dimensional estimate in a nonsmooth way or is a nonsmooth functional of ranks of one or more random variables.

Subfields: Education, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/a29f91c2aef47bff7e982f3b865ce73a9e92d12f

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Citations in the corpus

Breaking the Caste Barrier: Intergenerational Mobility in India (2013, methodology): “Another approach to measuring intergenerational mobility has been developed recently by Bhattacharya and Mazumder (2007, 2011).”
Intergenerational Mobility of Immigrants in the United States over Two Centuries (2021, background): “…is consistent with the idea that immigrant fathers from non-English speaking countries end up lower in the income distribution partly due to an imperfect command of English, thus leaving their children with more opportunity to move up the income distribution ( see also Bleakley and Chin 2010 .”
Analyses of Intergenerational Mobility (2015, background): “Bhattacharya and Mazumder (2011) criticize the standard transition matrix approach for relying on arbitrary discretizations of the distribution, which is strongly affected by measurement error (O’Neill, Sweetman, and Van de Gaer 2007).”
Race and Economic Opportunity in the United States: an Intergenerational Perspective* (2018, unknown): “This remains true even among children born to parents in the top 1 percent, implying that children born into high-income black families have substantially higher rates of downward mobility than whites across generations, consistent with Bhattacharya and Mazumder (2011). Indeed, a black child born to”