How Much Does Marital Sorting Contribute to Intergenerational Socioeconomic Persistence?

Abstract

This work investigates to what extent assortative mating contributes to intergenerational earnings persistence. I use an errors-in-variables model to demonstrate how pooling of partners’ “potential” earnings affects intergenerational earnings persistence, and I simulate persistence under different assumptions about assortative mating and women’s earnings distribution. Using Swedish data on cohorts born 1945–1965 and rank-based measures, I show that a substantial decline in marital sorting has contributed little to lowering intergenerational persistence. The intergenerational elasticity (IGE) is, however, more sensitive to sorting, in particular for women. Overall, variations in marital sorting must be large to affect intergenerational mobility to a great extent. Instead, the relative earnings distributions of men and women, in combination with sorting, are important for intergenerational persistence.