Exploring the Sources of Earnings Transmission in Spain

This paper explores the mechanisms behind the intergenerational earnings mobility in Spain by means of three exercises: calculating the transition matrix, decomposing the sources of earnings elasticity and estimating quantile regressions. By calculating the transition matrices we find a strong degree of persistence in educational attainment and especially in occupation. By decomposing the sources of earnings elasticity, we find that the correlation between children’s and their fathers’ occupations is the most important component. Finally, quantile regressions estimates show that the influence of the father’s earnings is greater when we move to the lower tail of the offspring’s earnings distribution, especially for daughters.