Spillover Bias in Multigenerational Income Regressions

A-Tier
Journal: Journal of Human Resources
Year: 2024
Volume: 59
Issue: 3

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A growing literature studies long-term income persistence across more than two generations. Despite a rich understanding of measurement-related biases for the parent–child model, far less is known for the multigenerational model that captures transmission from parents and grandparents. We show that even using a 25-year income average can result in a spurious grandparent coefficient. Importantly, for a given parental measure, averaging over more years for grandparents increases spillover bias. We propose an instrumental variables (IV) approach that can more effectively mitigate bias with shorter time spans of income. With Norwegian administrative data, we reveal a positive spillover bias in the grandfather coefficients.

Technical Details

RePEc Handle
repec:uwp:jhriss:v:59:y:2024:i:3:p:743-776
Journal Field
Labor
Author Count
2
Added to Database
2026-01-26