Earnings persistence across generations: Transmission through health?
Link to article:
Authors:
Eriksson, Tor, Bernt Bratsberg and Oddbjørn Raaum
Year:
2005
Reference:
Memorandum
Number in series: 35
Summary
Using a unique data set that links adult labour market outcomes and health status of a cohort of Danes and their parents, we study the interrelationships between transmission of health and economic status across generations. We first establish new evidence on intergenerational earnings resemblance in Denmark, obtaining estimates of father-child earnings elasticities of .29 for sons and .27 for daughters. Next, we show that children from low-income families are more likely to experience health problems in adulthood, and that poor health outcomes, such as back illness, heart disease, and psychological illness, affect labour earnings negatively. The data further reveal strong correlations of health outcomes across generations. When we condition on health status, estimates of the intergenerational earnings elasticity drop by a substantial amount—28 percent for sons and 25 percent for daughters. These findings point to parental investments in health and resemblance of health across generations as factors behind the pattern of low intergenerational earnings mobility observed in many countries.
JEL:
J28
Keywords:
Intergenerational mobility, health and earnings
Project:
Oppdragsgiver: Norges forskningsrådOppdragsgivers prosjektnr.:
Frisch prosjekt: 1211 - Inequality of opportunity and socio-economic outcomes from an intergenerational perspective
Financing:
Nordic Programme on Welfare Research under the Nordic Council of Ministers
