Intergenerational Mobility in Lifetime Income

Estimates of intergenerational mobility in lifetime income derived from incomplete income histories routinely incorporate in the estimation process, necessary life-cycle adjustments to annual income data. The two-stage method presented here first estimates proxies for fathers’ and sons’ lifetime family incomes from annual income observations, schooling and race; and then uses these income proxies to derive mobility measures. Applying this to United States PSID data for sons born between 1952 and 1981, we find a decline in intergenerational mobility in lifetime family income, as measured by the intergenerational elasticity of income, the rank-rank correlation, absolute upward mobility, and other indicators.