Love and Money: Intergenerational Mobility and Marital Matching on
Parental Income
by Joanne Blanden
Family and Labour Studies Division
Analytical Studies Branch research paper series, No. 272
Context
Intergenerational mobility is the extent to which incomes are independent
from one generation to the next. On the contrary, strong intergenerational
persistence means that an individual's family origins will have
a large influence on their later economic success. Many policy makers
and commentators are concerned that strong intergenerational persistence
indicates a lack of equality of opportunity.
Objectives
This paper makes use of matched tax-return data for daughters, their
parents, their partners and their partners' parents to investigate the
interactions between intergenerational mobility and marital matching
for young couples in Canada. It shows how assortative mating contributes
to intergenerational household income persistence.
Findings
The results indicate that assortative matching magnifies individual-level
intergenerational persistence. The strength of the association between
sons-in-law's income and women's parental income means that the intergenerational
link between household incomes is stronger than that found for daughters'
own incomes alone. This is also the case when viewed from the other
side, so that daughters' and their partners' earnings are related to
partners' parental income.
In the second part of the paper considers assortative mating by parental
income. It finds that daughter's parental income has an elasticity of
almost 0.2 with respect to her partner's parental income. This association
is of approximately the same magnitude as the intergenerational link
between parents' and children's incomes. The investigation of the variations
in the correlation between the parental incomes across several measured
dimensions shows cohabiting couples have lower correlations, as do those
who form partnerships early, those who live in rural areas and most
interestingly, those who later divorce. We interpret this last result
as evidence that, on average, couples with parental incomes that are
more similar enjoy a more stable match.
Data sources: The Intergenerational Income Data.
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the full publication.
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