Using Synthetic Panels to Estimate Intergenerational Mobility

James E. Foster
Jonathan Rothbaum

Documento de trabajo CEEY no. 13/2015

This paper studies the use of synthetic panels to estimate intergenerational income mobility in the absence of panel data. Using mobility curves, the authors show that while existing techniques for generating synthetic panels under strong parametric assumptions provide accurate estimates of transitions into and out of poverty, estimates of mobility a broader range of mobility measures are biased. The authors introduce a semiparametric technique using copulas to estimate synthetic panels. They validate their approach using data from the United States and show that their approach results in improved estimates of intra- and intergenerational mobility. The authors then apply the technique to estimate intergenerational income mobility in Mexico.