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Maximilian Stockhausen in Journal of Economic Inequality External Publication 17. August 2021 Like father, like son?: A comparison of absolute and relative intergenerational labour income mobility in Germany and the US

Are children better off than their parents? This highly debated question in politics and economics is investigated by analysing the trends in absolute and relative intergenerational labour income mobility for Germany and the US.

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A comparison of absolute and relative intergenerational labour income mobility in Germany and the US
Maximilian Stockhausen in Journal of Economic Inequality External Publication 17. August 2021

Like father, like son?: A comparison of absolute and relative intergenerational labour income mobility in Germany and the US

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Are children better off than their parents? This highly debated question in politics and economics is investigated by analysing the trends in absolute and relative intergenerational labour income mobility for Germany and the US.

High quality panel data is used for this purpose; the SOEP for Germany and the PSID for the US. In Germany, 67% of sons born between 1955 and 1975 earned a significantly higher real long-run labour income than their fathers. Those with fathers from the lowest earnings bracket were particularly mobile in absolute terms. In contrast, the fraction of US sons earning more than their fathers is 60% on average for the same cohorts. Their share decreased from 66% in the 1956–60 birth cohort to 48% in the 1971–75 birth cohort, while it changed very little in Germany. Overall, absolute as well as relative labour income mobility is larger in Germany than in the US. This indicates that economic growth has been distributed more broadly in Germany than in the US. While the majority of German males has been able to share in the country’s rising prosperity and are better off than their fathers, US males continue to lose ground. Hence, Chetty et al. (Science 356:398–406, 2017) seem to be right when they say that the American Dream is slowly fading away.

 

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A comparison of absolute and relative intergenerational labour income mobility in Germany and the US
Maximilian Stockhausen in Journal of Economic Inequality External Publication 17. August 2021

Like father, like son?: A comparison of absolute and relative intergenerational labour income mobility in Germany and the US

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Acceptance of Parliamentary Procedures in the Light of Individual Problem Perception
Matthias Diermeier / Judith Niehues IW-Trends No. 3 15. September 2021

Acceptance of Parliamentary Procedures in the Light of Individual Problem Perception

A lively democracy thrives on the struggle between different interest groups for majority opinion on specific issues. Though the institutionalised process of balancing interests and hearing opposing points of view takes time, acceptance of these parliamentary ...

IW

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Judith Niehues / Maximilian Stockhausen IW-Report No. 18 19. May 2021

Inequality Revisited: An International Comparison with a Special Focus on the Case of Germany

This report summarizes the latest findings on the development and levels of global income and wealth inequality and puts special emphasize on the situation in Germany.

IW

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