Working Papers

Understanding the Heterogeneity of Intergenerational Mobility across Neighborhoods with Steven N. Durlauf, Rasmus Landersø, and Salvador Navarro

NBER Working Paper #33035

This version: October 2024

Recent research has uncovered large spatial heterogeneity in intergenerational mobility across neighborhoods in countries around the world. Yet there is little consensus on the reasons why mobility is high in some neighborhoods and low in others. This paper analyzes a generalized mobility model that examines the roles that families’ selection into neighborhoods and locational characteristics play in generating this spatial heterogeneity. We use administrative data from Denmark to decompose variation in mobility across nearly 300 larger and 2,000 smaller neighborhoods along these dimensions, accounting for sampling error. Families’ selection into neighborhoods and sampling error explain most observed heterogeneity across neighborhoods. Our generalized model explains most of the differences in mobility between neighborhoods, though a small but persistent difference remains between neighborhoods that our model cannot account for. An analysis of this “irreducible heterogeneity” suggests that neighborhoods exhibit multiple types in terms of their mobility effects.

Does "Welfare-to-Work" Work? Evaluating Long-Run Effects across a Generation of Cohorts

This version: May 2024

Winner of APPAM PhD Dissertation Award, Runner-up of NTA Outstanding Doctoral Dissertation Award 

Work requirements in means-tested welfare programs remain a popular yet controversial policy around the world. This paper provides a unified evaluation of welfare-to-work by estimating the long-run effects of Denmark's social assistance reforms on a comprehensive set of outcomes for 19 different birth cohorts. Effects are highly heterogeneous across cohorts based on the time the reforms were introduced in the life cycle. Individuals facing the reforms as adults incur null or modest negative effects on income and some substitute toward crime and disability insurance. Meanwhile, children exposed to the reforms before they were eligible for social assistance experience significant gains in education, income, and measures of health. This heterogeneity is consistent with a model where younger cohorts invest in their human capital in anticipation of future work requirements while older cohorts adjust along alternative margins with high social costs. Evidence suggests that heterogeneity across cohorts can persist for decades over the life cycle and spill over to their own children. Cost-benefit analyses reveal that welfare-to-work is cost-effective in the long run, but this appears to be driven by anticipatory behavioral responses of younger cohorts aging into the new policy regime. These findings shed light on the interpretation of aggregate effects of welfare-to-work over time, help unify an expansive literature, and point to more efficient policy designs.

Immobility as Memory: Some New Approaches to Characterizing Intergenerational Dependence via Markov Chains with Lawrence E. Blume, Steven N. Durlauf, and Aleksandra Lukina

NBER Working Paper #33166

First version: February 2024.  This version: November 2024

Revisions requested at Sociological Methods & Research

This paper proposes some new measures of intergenerational persistence based on the idea of characterizing the memory of origin in the stochastic process that links the socioeconomic classes of parents and children. We introduce "memory curves" for all future generations given any initial condition of class for a family dynasty, which reveal how initial conditions interact with the transition process between parents and children to create mobility and persistence. We also propose ways to aggregate information across different classes to produce overall characterizations of mobility in the population. To illustrate our measures, we estimate occupational "memory curves" using U.S. survey data.  Our findings show that, on average, the memory of initial conditions dissipates largely within three generations, though there is meaningful heterogeneity in mobility rates across dynasties originating from different occupational classes.

Intergenerational Mobility with Steven N. Durlauf

NBER Working Paper #29760

Prepared for The Inequality Reader, Fifth Edition, D. Grusky, N. Dahir and C. Daviss, eds.

This version: February 2022

This essay reviews the theory and empirics of intergenerational mobility. Our review draws on models and empirical analyses of classic and more recent work from both economics and sociology. We summarize models and the surrounding empirical evidence of two key sets of mechanisms: family factors (income, education, credit constraints, household composition, and genes) and social factors (schools, neighborhood sorting, racial segregation, and peer and role model effects). We then discuss and evaluate current methods used to measure intergenerational mobility, including linear regressions and Markov chains. Theoretical models imply nonlinear relationships between parent and child status that are often ignored in practice and offer potentially different interpretations of the evidence of heterogeneity in mobility across locations, groups, and time. We conclude that the next generation of studies would benefit from a closer integration of theory with empirics.

Works in Progress

The Effects of Participating in Multiple Safety Net Programs on Family Well-Being with Derek Wu

Intergenerational Bottlenecks with Joshua Shea

Long-Run Effects of Two-Generational Social Policy at Scale