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Working Paper, No. 2017-05, 2017
The Decline in Intergenerational Mobility After 1980 (REVISED February 21, 2020)

We demonstrate that relative intergenerational mobility declined sharply for cohorts born in the early 1960s compared to those born around 1950. The former entered the labor market largely after the large rise in inequality that occurred around 1980 while the latter entered the labor market well before this inflection point. We show that the rank-rank slope rose from 0.24 to 0.36 and the IGE increased from 0.21 to 0.50. We find that both the increase in the returns to schooling and the gradient in the likelihood of marriage by parent income can explain some of the increase in persistence. We also find direct evidence of a decline in absolute intergenerational mobility using intergenerational data, consistent with the bounds-based approach of Chetty et al. (2017).

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