Author(s)  
Giovanni Gallipoli
Hamish Low
Aruni Mitra
We characterize the joint evolution of cross-sectional inequality in earnings, other sources of income and consumption across generations in the U.S. To account for cross-sectional dispersion, we estimate a model of intergenerational persistence and separately identify the influences of parental factors and of idiosyncratic life-cycle components. We find evidence of family persistence in earnings, consumption and saving behaviours, and marital sorting patterns. However, the quantitative contribution of idiosyncratic heterogeneity to cross-sectional inequality is significantly larger than parental effects. Our estimates imply that intergenerational persistence
is not high enough to induce further large increases in inequality over time and across generations.
Publication Type  
Working Paper
File Description  
First version, August 11, 2020
JEL Codes  
D15: Intertemporal Household Choice; Life Cycle Models and Saving
D64: Altruism; Philanthropy
E21: Macroeconomics: Consumption; Saving; Wealth
Keywords  
income
Consumption
intergenerational persistence
Inequality