Intergenerational Mobility in the United States and Great Britain: A Comparative Study of Parent–Child Pathways

We build on cross‐national research to examine the relationships underlying estimates of relative intergenerational mobility in the United States and Great Britain using harmonized longitudinal data and focusing on men. We examine several pathways by which parental status is related to offspring status, including education, labor market attachment, occupation, marital status, and health, and perform several sensitivity analyses to test the robustness of our results. We decompose differences between the two nations into that part attributable to the strength of the relationship between parental income and the child's characteristics and the labor market return to those child characteristics. We find that the relationships underlying these intergenerational linkages differ in systematic ways between the two nations. In the United States, primarily because of the higher returns to education and skills, the pathway through offspring education is relatively more important than it is in Great Britain; by contrast, in Great Britain the occupation pathway forms the primary channel of intergenerational persistence.     

Social Status,Labour Market Frictions and Endogenous Growth

This paper develops an endogenous growth model that incorporates wealth‐enhanced preferences for social status and labour market frictions to investigate the role of social status in determining unemployment and long‐run growth. We show that the increase in the desire for social status reduces the unemployment rate, but its effect on long‐run growth is unclear. We then calibrate our model to the US economy and find that an increase in the desire for social status lowers the unemployment rate and enhances the economic growth rate in the long run.     

Income mobility of individuals in China and the United States

Although much has been written about annual income inequality in China, little research has been conducted on longer‐run measures of income inequality and on income mobility. This paper compares income mobility of urban individuals in China and the United States in the 1990s. The following questions are taken up: To what extent are measures of annual income inequality misleading indicators of long‐run income inequality? How much income mobility was there in China in the first half of the 1990s and how did this compare with mobility in other countries? Have real income increases been greater for the poor or the rich? How important is the variation in permanent incomes in China and how has this changed?     

Labor markets and cultural values: Evidence from Japanese and American views about caregiving immigrants

One overlooked reason for the persistence of distinct cultural values across rich democracies, we argue, is a country's labor market structure. Parents seeking to position their children for long‐term success would do well to instill values consistent with requirements of the labor market in the country where their children are likely to work. To the extent that labor markets are fluid, as in the United States, parents should teach their children to be resourceful and creative. In countries like Japan with relatively rigid labor markets, where workers have one chance to land a long‐term contract with a leading company, parents instead should instill the values of hard work and respect for authority. We find evidence consistent with this argument in survey experiments about attitudes in the United States and Japan about the desirability of employing immigrants for care work, and what values the immigrant care workers should hold. We also find evidence of indirect norm creation. American and Japanese respondents prefer immigrants—not just caregiving immigrants—whose values align with their country's type of valued human capital.     

Intergenerational Earnings and Income Mobility in Spain

This paper contributes to the large number of studies on intergenerational earnings and income mobility by providing new evidence for Spain. Since there are no Spanish surveys covering long‐term information on both children and their fathers' income or earnings, we deal with this selection problem using the two‐sample two‐stage least squares estimator. We find that intergenerational mobility in Spain is similar to that in France, lower than in the Nordic countries and Britain, and higher than in Italy and the United States. Furthermore, we use the Chadwick and Solon approach to explore intergenerational mobility in the case of daughters and we find similar results by gender.     

An Eaton–Kortum model of trade and growth

We combine a multi‐country, continuum‐good Ricardian model of Eaton and Kortum (2002) with a multi‐country AK model of Acemoglu and Ventura (2002) to examine how trade liberalization affects countries' growth rates and extensive margins of trade over time. Focusing on the three‐country case, we obtain three main results. First, a permanent fall in any trade cost raises the balanced growth rate. Second, trade liberalization increases the liberalizing countries' long‐run fractions of exported varieties to all destinations. Third, the long‐run effects of trade liberalization are different from its short‐run effects, which can reverse the welfare implications of the static Eaton–Kortum model.     

International Bank Portfolios: Short‐ and Long‐Run Responses to Macroeconomic Conditions

International bank portfolios constitute a large component of international country portfolios. Yet, banks' response to international macroeconomic conditions remains largely unexplored. We use a novel dataset on banks' international portfolios to answer three questions. First, what are the long‐run determinants of banks' international portfolios? Second, how do banks' international portfolios adjust to short‐run macroeconomic developments? Third, does the speed of adjustment change with the degree of financial integration? We find that, in the long‐run, market size has a positive impact on foreign assets and liabilities. An increase in the interest differential between the home and the foreign economy lowers foreign assets and increases foreign liabilities. Foreign trade has a positive impact on international bank portfolios, which is independent from the effect of other macroeconomic variables. Short‐run dynamics show heterogeneity across countries, but these dynamics can partly be explained with gravity‐type variables.     

Preferences for redistribution in the land of opportunities

This paper explores how individual preferences for redistribution depend on future income prospects. In addition to estimating the impact of individuals' socioeconomic background and of their subjective perceptions of future mobility, we employ panel data to construct ‘objective’ measures of expected gains and losses from redistribution for different categories of individuals. We find that such measures have considerable explanatory power and perform better than ‘general mobility’ indexes. We also find that preferences for redistribution respond to individual beliefs on what determines one's position in the social ladder. Ceteris paribus, people who believe that the American society offers 'equal opportunities are more averse to redistribution.     

A fair share: Burden-sharing preferences in the United States and China

Using a sequential discrete choice experiment, we investigate preferences for distributing the economic burden of reducing CO₂ emissions in the two largest CO₂-emitting countries: the United States and China. We asked respondents about their preferences for four burden-sharing rules to reduce CO₂ emissions according to their country's relative (1) historical emissions, (2) income level, (3) emissions per capita, and (4) current emissions. We found that respondents overall favored the rule that was least costly for their country. In addition, the willingness to pay was much higher in China, suggesting that how mitigation costs are shared across countries is more important for Chinese than for Americans. To some extent the willingness to pay varies with socioeconomic characteristics and attitudes. For example, university-educated respondents in the United States are willing to pay more for the rule that is the least costly for their own country, compared with those with a lower education level. At the same time, the ranking of the two most preferred rules are generally robust across all socioeconomic groups within each country.     

The impact of sub‐national institutions

This paper assesses the effect of sub‐national institutions on the economic performance of Russia's regions (oblasts, republics, krais and okrugs) from 2001 to 2008, a period of rapid economic advancement and recentralization. Approximating sub‐national institutions with the RA Expert index of investment risk, we find that a reduction in investment risk by one standard deviation increases output by 1.4 percent in the short run and 11.9 percent in the long run, suggesting a substantial regional performance gap in government practices, despite intensive political recentralization. Assuming that the main components of effective governance are running satisfactory public health programmes aimed at decreasing overall mortality among the working‐age population, creating fair labour market conditions and improving the regional institutional climate to encourage investment in fixed assets, we argue that sub‐national institutions remain important for growth in post‐Soviet Russia after 2000. This paper contributes to the literature on institutional persistence.     

Rigid labour markets with trade and capital mobility: theory and evidence

Abstract We develop a multi‐country model with imperfect labour markets to study the effect of labour market frictions on bilateral trade flows. We use a framework that allows for goods trade and capital mobility and show that labour market imperfections exert opposite effects in the absence of capital mobility (the short run) and its presence (the long run), respectively. In the short run, a higher degree of labour market rigidity decreases the value of total trade, but increases the share of intra‐industry trade for a country that is larger than its trading partner. The reverse effects are observed when capital is allowed to cross country borders. Using data on unemployment and income distribution for 23 OECD countries, we compute the central parameter in our theoretical model that describes the degree of labour market rigidity. We use this new empirical concept to provide evidence for our theoretical findings by means of reduced‐form regressions as well as simulation results of a calibrated general equilibrium model.     

INCOME INEQUALITY,MEDIA FRAGMENTATION,AND INCREASED POLITICAL POLARIZATION

The increasing polarization of congressional voting has been linked to legislators' inability to reach consensus on many pressing economic issues. We examine two potential factors driving polarization: greater income inequality and the increasingly fragmented state of American media. Using cointegration techniques, we find evidence indicating that media fragmentation has played a more important role than inequality. Periods of rising media fragmentation are followed by increased polarization. If recent patterns of media structure and income inequality persist, a polarized policymaking environment will likely continue to impede efforts to address major challenges, such as the long‐run fiscal imbalances facing the United States. (JEL D72, D31)     

Migration,Friendship Ties,and Cultural Assimilation

We study immigrant assimilation by analyzing whether friendship with natives is a measure of cultural assimilation, and by investigating the formation of social ties. Using the German Socio‐Economic Panel, we find that immigrants with a German friend are more similar to natives than those without German friends, along several important dimensions, including concerns about the economy, an interest in politics, and a host of policy issues. Turning to friendship acquisition, we find that becoming employed, time spent in the host country, the birth of a child, residential mobility, and additional education acquired in the host country are significant drivers of social network variation.     

Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States

This paper compares income inequality and income mobility in the Scandinavian countries and the United States during 1980–90. The results suggest that inequality is greater in the United States than in the Scandinavian countries and that this inequality ranking of countries remains unchanged when the accounting period of income is extended from one to eleven years. The pattern of mobility turns out to be remarkably similar, in the sense that the proportionate reduction in inequality from extending the accounting period of income is much the same. But we do find evidence of greater dispersion of first differences of relative earnings and income in the United States. Relative income changes are associated with changes in labor market and marital status in all four countries, but the magnitude of such changes are largest in the United States.     

家庭养老功能的弱化与出路:欠发达地区农村养老模式研究

社会转型期农村传统的家庭养老受到冲击。通过对苏北某县的调查,分析欠发达地区农村养老模式的特点。调查地的农村自我养老的比重已经超过家庭养老,农村养老从传统的家庭成员经济供养、生活照料、情感慰藉为主转变为老年人的经济自给、生活自理和情感自抚为主。农村养老模式的这种变化其原因在于人口流动严重削弱了传统家庭养老,而另一方面,社会养老又尚未建立,因而是现阶段的一种被动无奈的选择,是一种过渡性模式。长远来看,欠发达地区农村养老的出路是走向社会养老。为此,须在完善农村社会养老保障机制的同时,积极构建农村养老的社会支持体系。     

Two‐sample nonparametric estimation of intergenerational income mobility in the United States and Sweden

We estimate intergenerational income mobility in the US and Sweden, using a new nonparametric approach. The approach addresses several empirical issues raised in the literature and applies when other estimators are infeasible. We argue that previous estimates of income mobility conceal the heterogeneous nature of the transmission mechanism by keeping mobility constant across families. The striking differences we find between mobility patterns across family backgrounds, captured by father's education, lead us to question the conventional result that intergenerational transmission of earnings is weaker in Sweden than in the United States, for important parts of the population.     

Heterogeneity,saving-investment dynamics and capital mobility in Latin America

The purpose of this paper is to analyze the dynamics of national saving-investment relationship in order to determine the degree of capital mobility in 12 Latin American countries. The analytically relevant correlation is the short-term one, defined as that between changes in saving and investment. Of special interest is the speed at which variables return to the long run equilibrium relationship, which is interpreted as being negatively related to the degree of capital mobility. The long run correlation, in turn, captures the coefficient implied by the solvency constraint. We find that heterogeneity and cross-section dependence completely change the estimation of the long run coefficient. Besides we obtain a more precise short run coefficient estimate compared to the existent estimates in the literature. There is evidence of an intermediate degree of capital mobility, and the coefficients are extremely stable over time.      

Oil,Growth, and Health: What Does the Cross‐Country Evidence Really Show?*

We show that previous results from the body of literature on the resource curse have primarily been driven by the collapse in oil prices during the mid‐1980s. By exploiting cross‐country variations in the size of initial oil endowments and the timing of oil discoveries, we find that there is a stable positive relationship between oil abundance and long‐run economic growth. Using dynamic panel data methods, we also find that there is no evidence that higher oil rents hinder growth. However, to focus on material gain means that the welfare gain from oil is understated, because oil‐rich countries benefit more by the reduction in infant mortality and the gain in longevity. Interestingly, such oil‐led health improvements are more pronounced in non‐democratic countries, where initial heath conditions were poor and oil wealth is concentrated among the ruling elites.     

ESTIMATING IMPORT AND EXPORT DEMAND ELASTICITIES FOR MAURITIUS AND SOUTH AFRICA

In this paper, we re‐estimate the import and the export demand functions for Mauritius and South Africa using time series data. We use the bounds tests for cointegration and find evidence of a long‐run relationship between import demand, income and prices for both countries. Our long run elasticities reveal that domestic income and relative prices have significant effects on the import demand for both countries, with income being the most important determinant. Furthermore, we find that while South Africa's export demand is not responsive to relative prices or income; for Mauritius income is statistically significant.     

Capital Mobility, Consumption Substitutability and the Effects of Monetary Policy in Open Economies

Abstract. I use a dynamic general equilibrium two‐country optimizing model to analyze the implications of international capital mobility for the short‐run effects of monetary policy in an open economy. The model implies that the substitutability of goods produced in different countries plays a central role for the impact of changes in the degree of international capital mobility on the effects of monetary policy. Paralleling the results of the traditional Mundell–Fleming model, a higher degree of international capital mobility magnifies the short‐run output effects of monetary policy only if the Marshall–Lerner condition, which is linked to the cross‐country substitutability of goods, holds.