Understanding Patterns and Trends in Income Mobility through Multiverse Analysis (with Carina Mood) | working paper
Read moreRising inequalities in rich countries have led to concerns that the economic ladder is getting harder to climb. It is well established that intergenerational income mobility is lower in countries with high inequality, but research on trends in mobility finds conflicting results. Motivated by this uncertainty, we ask: how important are choices of specification for levels and trends in intergenerational income associations? We use Swedish data on cohorts born 1958--1977 and their parents. Varying how, when and for whom income is measured, we estimate 1,658,880 different associations (82,944 specifications across 20 cohorts). Our results reveal that model choice is an underrecognized source of variation in intergenerational mobility research. The most consistent contributor to trends is the advancement of women in the labor market, which leads to increased persistence in women’s earnings and the family income of both men and women. Depending on specification, it is possible to conclude that income mobility is increasing, decreasing, or remaining flat. Despite variability, our results are broadly consistent with the received view that the level of mobility in Sweden is high in a comparative perspective.
Firms and the Intergenerational Transmission of Labor Market Advantage (with Nathan Wilmers) | working paper
Read moreRecent research finds that pay inequality stems both from firm pay-setting and from workers’ individual characteristics. Yet, intergenerational mobility research remains focused on transmission of individual traits, and has failed to test how firms shape the inheritance of inequality. We study this question using three decades of Swedish population register data, and decompose the intergenerational earnings correlation into firm pay premiums and stable worker effects. One quarter of the intergenerational earnings correlation at midlife is explained by sorting between firms with unequal pay. Employer or industry inheritance account for a surprisingly small share of this firm-based earnings transmission. Instead, children from high-income backgrounds benefit from matching with high-paying firms irrespective of the sources of parents’ earnings advantage. Our analysis reveals how an imperfectly competitive labor market provides an opening for skill-based rewards in one generation to become class-based advantages in the next.
Within-School Achievement Sorting in Comprehensive and Tracked Systems (with Isabel Raabe) | working paper
Read moreWhy do inequalities in schooling persist, even in relatively egalitarian school systems? This paper examines within-school sorting as an explanation. We use classroom data on friendship networks in 480 European secondary schools, and contrast comprehensive (England, Sweden) and tracked systems (Germany, Netherlands). Our question is to what extent comprehensive systems reduce achievement sorting at the level of (a) schools, (b) classrooms, and (c) friendships. Between-school variance in achievement is lower in comprehensive systems. However, this is counterbalanced by greater sorting within schools, between classrooms and, especially, in friendship networks. Still, comprehensive schools create more equal environments for two reasons. First, the difference in between-school sorting is larger than the difference in within-school sorting. Second, within-school sorting is less strongly related to social background characteristics. These findings help explain both why comprehensive schools produce more equal outcomes, and how substantial inequality can nevertheless persist.
A Caution on the Discordant Parenting Design (with Martin Hällsten) | working paper
Read moreRecent studies use family fixed effects to estimate the influence of parental characteristics on children, a practice we call the “discordant parenting design”. This approach is valid only if treatment effects are equal within and between families. This assumption is mostly not informed by relevant theory and, we argue, unlikely to hold in practice. In addition, within-family confounding, reverse causality, and selection into identification complicate the interpretation of these studies further. We discuss three applied examples—the effects of parenting, family income, and neighborhood context—and provide some general guidance. To avoid misinterpretation, researchers should have a strong grasp of the variance that enters into estimation, and not just the potential confounders that a given strategy is designed to deal with.
Is Immigrant Optimism Contagious? Spillovers of Immigrant Friends in School (with Are Skeie Hermansen) | draft on request