Latest drafts of my research papers:
Work in Progress:
Kinship Correlations and Intergenerational Mobility
The Dynamic Response of Municipal Fiscal Budgets to Revenue Shocks
with Ines Helm
Intergenerational Mobility with Names: Evidence from the Finnish Veteran Database
with Torsten Santavirta
Occupational Choice and Family Background: the Role of Borrowing Constraints
with Salvatore Lo Bello
Published and Working Papers:
A large literature exploits geographic variation in the concentration of immigrants to identify their impact on a variety of outcomes. To address the endogeneity of immigrants’ location choices, the most commonly-used instrument interacts national inflows by country of origin with immigrants’ past geographic distribution. We present evidence that estimates based on this “shift- share” instrument conflate the short- and long-run responses to immigration shocks. If the spatial distribution of immigrant inflows is stable over time, the instrument is likely to be correlated with ongoing responses to previous supply shocks. Estimates based on the conventional shift-share instrument are therefore unlikely to identify the short-run causal effect. We propose a “multiple instrumentation” procedure that isolates the spatial variation arising from changes in the country- of-origin composition at the national level and permits us to estimate separately the short- and long-run effects. Our results are a cautionary tale for a large body of empirical work, not just on immigration, that rely on shift-share instruments for causal inference.
The Impact of Immigration: Why Do Studies Reach Such Different Results?
with Christian Dustmann and Uta Schönberg
Published in the Journal of Economic Perspectives, Vol. 30(4), 2016
Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment
Interpreting Trends in Intergenerational Mobility
We show that events in previous generations can explain contemporaneous shifts in intergenerational mobility. We first study the dynamic response of income mobility to structural changes in a model of intergenerational transmission. Mobility today depends on past policies and institutions, such that major reforms may generate long-lasting mobility trends over multiple generations. These trends are often non-monotonic, as mobility tends to be highest when a structural change occurs. Times of change are thus times of high mobility, while declining mobility today may reflect past gains rather than a recent deterioration of “equality of opportunity”. We then exploit data over three generations and a compulsory school reform in Sweden to test the dynamic implications of our model. The reform had a large, long-lasting, and non-monotonic effect: it reduced the transmission of disparities in income and education from parents to their offspring in the directly affected generation, but increased intergenerational persistence in the next.
The Transmission of Inequality Across Multiple Generations:
Testing Recent Theories with Evidence from Germany
This paper shows that across multiple generations, the persistence of occupational and educational attainment in Germany is larger than estimates from two generations suggest. We consider two recent interpretations. First, we assess Gregory Clark’s hypotheses that the true rate of intergenerational persistence is higher than the observed rate, as high as 0.75, and time-invariant. Our evidence supports the first but not the other two hypotheses. Second, we test for independent effects of grandparents. We show that the coefficient on grandparent status is positive in a wide class of Markovian models, and present evidence against its causal interpretation.
Biases in Standard Measures of Intergenerational Income Dependence
Estimates of the most common mobility measure, the intergenerational elasticity, can be severely biased if snapshots are used to approximate lifetime income. However, little is known about biases in other popular dependence measures. We use long Swedish income series to provide such evidence for log-linear and rank correlations, and rank-based transition probabilities. Attenuation bias is considerably weaker in rank-based measures. Life-cycle bias is strongest in the elasticity; moderate in the log-linear correlation; and small in rank-based measures. However, with important exceptions: persistence in the tails of the distribution is considerably higher, and long-distance downward mobility considerably lower, than estimates from short-run income suggest.
Mobility Across Multiple Generations: The Iterated Regression Fallacy
download PDF, earlier working paper
Empirical evidence on the degree of long-run mobility across multiple generations is scarce. Predictions are instead routinely derived by exponentiation of intergenerational measures, implying high long-run mobility even when intergenerational mobility is low. Such extrapolations however presume that regression implies iterated regression, a statistical fallacy whose prevalence I briefly discuss. I then examine how elements of the transmission process affect the relation between intergenerational and multigenerational mobility. Considering direct and indirect transmission, the multiplicity of skills, and the role of grandparents I conclude that long-run mobility will likely be lower, possibly much lower, than predictions from intergenerational evidence suggest. I support these theoretical predictions with evidence from Swedish registries that cover three generations.
Previous version available as IZA Discussion Paper No. 7072