Comparable Estimates of Intergenerational Income Mobility in Italy

This paper examines the degree of intergenerational economic mobility in Italy. It adds to the growing number of international studies of the extent to which economic status is passed on across generations. On the basis of recent econometric innovations used in the literature (Bjorklund and Jantti, 1997), we are able to overcome some of the data limitations for Italy. We use the Historical Database of the Bank of Italy households survey, which contains information from 1977 to 2002. Retrospective information in the repeated cross-sections may be exploited by applying a two-sample two stage least squares estimation. We estimate the intergenerational income elasticity for Italy and find that mobility is limited. From an overall comparison, the evidence provided in this paper hints at Italy in the low-mobility group among advanced societies in the range of values found in the US and the UK. The analysis of the results allows a characterization of the main patterns in the transmission of economic status in Italy. JEL Codes: J62; D31