Frisch seminar: Zach Parolin

Abstract: Greater exposure to poverty during childhood is associated with a higher likelihood of poverty in adulthood. However, past research offers competing accounts of the mechanisms through which the intergenerational persistence of poverty is channeled and the contexts in which intergenerational poverty is stronger or weaker. This study uses administrative- and survey-based panel datasets to investigate differences in the intergenerational persistence of poverty in the United States (U.S.), Australia, Denmark, Germany, Switzerland, and the United Kingdom. We introduce an accounting framework to fully decompose the association of childhood poverty exposure and adult poverty into four components: family background, mediating benchmarks, tax and transfer insurance effects, and a residual poverty penalty. We find that the intergenerational persistence of poverty in the U.S. is around twice as strong as in Australia, the United Kingdom, and Germany, and two-thirds stronger than in Switzerland. In contrast to dominant perspectives in the intergenerational mobility literature, we find that the U.S. disadvantage is not primarily channeled through family background effects, mediation effects (such as unequal access or returns to education), neighborhood effects, or racial/ethnic discrimination. Instead, the U.S. has comparatively weak tax/transfer insurance effects and a more severe residual poverty penalty than in other countries. We elaborate on other cross-national differences and implications for promoting upward mobility out of poverty.  

With: