Intergenerational Economic Mobility in the U.S., 1940 to 2000
We estimate a time series of intergenerational economic mobility using a two sample
estimation approach that matches individuals in the Census to synthetic parents in the prior
generation based on state of birth and cohort. We find that mobility increased from 1950 to 1980
but has declined sharply since 1980. While our estimator places greater weight on birth location
effects than the standard intergenerational coefficient, evidence suggests that the size of the bias is
small and unlikely to account for the sharp change since 1980. The recent decline in mobility is
only partially explained by education. Our preferred set of results suggest that the rate at which
earnings are regressing to the mean is slower now than at any time in the post World War II period
causing economic differences between families to persist longer than they had mid-century.
However, current rates of positional mobility, as measured by the intergenerational correlation,
appear historically normal.
