Intergenerational income mobility across three generations in Japan
This study provides new evidence on multigenerational income mobility in Japan using representative household panel data, Japan Household Panel Survey (JHPS) and JHPS Second-Generation Supplement (JHPS-G2). We impute the lifetime incomes of three generations based on education and occupation, addressing the issue of unobservable grandparents’ income by estimating income returns to occupation and education for grandparents using microdata from the Social Stratification and Social Mobility (SSM) survey. Our findings show that the income elasticity between the grandparental and parental generations is 0.35, and that between the grandparental and grandchild generations is 0.147, indicating the existence of multigenerational income persistence. However, the transmission of income from grandparents to grandchildren primarily occurs through the parental generation, consistent with an AR(1) process. These results enhance our understanding of economic mobility and demonstrate that while multigenerational perspectives provide deeper insights into long-term economic persistence, two-generation models remain valid under certain conditions.
