Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/287460 
Year of Publication: 
2021
Citation: 
[Journal:] The Journal of Economic Inequality [ISSN:] 1573-8701 [Volume:] 19 [Issue:] 4 [Publisher:] Springer US [Place:] New York, NY [Year:] 2021 [Pages:] 667-683
Publisher: 
Springer US, New York, NY
Abstract: 
Are children better off than their parents? This highly debated question in politics and economics is investigated by analysing the trends in absolute and relative intergenerational labour income mobility for Germany and the US. High quality panel data is used for this purpose; the SOEP for Germany and the PSID for the US. In Germany, 67% of sons born between 1955 and 1975 earned a significantly higher real long-run labour income than their fathers. Those with fathers from the lowest earnings bracket were particularly mobile in absolute terms. In contrast, the fraction of US sons earning more than their fathers is 60% on average for the same cohorts. Their share decreased from 66% in the 1956–60 birth cohort to 48% in the 1971–75 birth cohort, while it changed very little in Germany. Overall, absolute as well as relative labour income mobility is larger in Germany than in the US. This indicates that economic growth has been distributed more broadly in Germany than in the US. While the majority of German males has been able to share in the country's rising prosperity and are better off than their fathers, US males continue to lose ground. Hence, Chetty et al. (Science 356:398–406, 2017) seem to be right when they say that the American Dream is slowly fading away.
Subjects: 
Absolute intergenerational mobility
Inequality
Labour income distribution
Relative intergenerational mobility
Classification: D63
J62
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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