Earnings Mobility and Origin Dependence: What can twins say together with nonparametric econometrics?

This study focuses on earnings immobility and its relation to the originin terms of both the social background and the initial position in the earnings distribution. Twin data is used to reveal the importance for the common background for immobility. A nonparametric technique is used to study if the immobility varies over the distribution. The results indicate strong immobility, an important effect of the background, and that these effects vary over the distribution. For the male monozygotic sample, the social background accounts for 71-88 percent of the immobility in deciles 3 to 7, where the background is found to be most important. The common background has its strongest impact in deciles 6 to 10 for the female sample, where these effects accounts for 66-77 percent of the immobility. Comparing results for monozygotic and dizygotic twins also indicate that genes play an important role in income immobility.