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Essay On Intergenerational Income Mobility

540 Words3 Pages

When talking about intergenerational income mobility, one cannot downplay the effect parents on their children. It is a well known fact that parent earnings have a profound effect on the earnings of that individual. Much of George Borjas ' work takes this a step further with a focus on what he calls "Ethnic Capital". Borjas defines this as the mean earnings of the ethnic group in the parents ' generation. In his paper, Ethnicity, Neighborhoods, and Human-Capital Externalities, Borjas examines ethnic externalities affecting intergenerational improvement. Specifically, how ethnically-segregated neighborhoods factor into the interplay between the two. For his empirical analysis Borjas uses the 1/100 Neighborhood File of the 1970 Public Use Sample of the U.S. Census and a version of the National Longitudinal surveys of Youth (NLSY). The Census data group workers into one of over 40,000 neighborhoods. The NLSY file groups workers into one of 1,978 zip codes. From this, it is possible to see how ethnic groups segregate and the impact of this segregation on the human-capital accumulation process as well as on intergenerational mobility. Borjas first examines Residential Segregation in the 1970s Census. The Census includes much demographic data, including immigrant status (first or second generation). He restricts his sample …show more content…

He lays out propositions and uses his analysis to move forward by proving that these propositions hold. I admit I don 't fully grasp the particulars of how Borjas uses his Propositions. I understand the mechanics of his regressions and his use of the Census data seems valid even if I don 't fully comprehend the reasoning behind

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