Family, Community and Long-Term Socioeconomic Inequality: Evidence from Siblings and Youth Peers

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Abstract

Using administrative data for the population of Danish men and women, we develop an empirical model which accounts for the joint earnings dynamics of siblings and youth community peers. We provide the first decomposition of the sibling correlation of permanent earnings into family and community effects allowing for life-cycle dynamics, and extend the analysis to consider other outcomes. We find that family is the most important factor influencing sibling correlations of earnings, education and unemployment. Community background matters for shaping the sibling correlation of earnings and unemployment early in the working life, but its importance quickly diminishes.
Original languageEnglish
Article numberueaa121
JournalEconomic Journal
Early online date5 Nov 2020
DOIs
Publication statusE-pub ahead of print - 5 Nov 2020

Keywords

  • Sibling correlation
  • Schools
  • Life cycle earnings
  • Neighbourhoods
  • education
  • unemployment

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