Intergenerational earnings mobility in Turkey :|a comparable estimate

Abstract

In this paper, we empirically examine the extent of intergenerational income mobility in Turkey. We do this by providing cross-country comparable estimates of intergenerational earnings and income elasticities (IGE) using a two-sample instrumental variable method. In doing so, we exploit retrospective information on parental education and occupation from the Survey of Income and Living Conditions by TurkStat. First, we find that the intergenerational earnings elasticity between fathers and sons in Turkey is around 0.5 indicating a similar level of mobility with the US. Second, we reveal an immense effect of parents’ earnings on daughters’ earnings with the estimated elasticities around 1. We document that this results from historically low labor force participation and the self-selection of females into employment in Turkey. Accordingly, household income mobility appears to be similar for both sons and daughters. Third, we observe a decline in mobility for more recent cohorts. Fourth, descendants residing in more affluent regions of Turkey are more likely to have experienced upward mobility. Finally, we complement our analysis using alternative mobility measures such as rank-rank slope, degree of upward mobility and presenting mobility transition matrices, which reveal stronger persistence on extreme ends of the income distribution. Our findings mostly align with the previous literature on intergenerational educational mobility in Turkey.