Unobservable Family and Individual Contributions to the Distributions ofIncome and Wealth

J. R. Kearl, Clayne L. Pope

NBER Working Paper No. 1425
Issued in August 1984
NBER Program(s):Development of the American Economy

This paper uses a data set composed of combinations of full brothers, half brothers as well as fathers and sons to measure the effect of common family background on households'income and wealth. While the data is drawn from a nineteenth century population, the intra-class correlation (after the effects of age, occupation, nativity, residence and duration in the economy have been removed) for income ranges from .13 to .18 which is similar to that found in modern samples. Intra-class correlations for wealth are significantly higher (.18 to .35) than those for income. The addition of fathers' observed characteristics to the sweeping regressions reduces the unobserved common background effect shared by brothers by about twenty percent.The intra-class correlations of half brothers were lower than those observed for full brothers though the small differences between the two groups suggest that fathers played a dominant role in the transmission of the common family effect. Unobserved background was decomposed into individual and family effects by a variance components procedure. The individual effect was dominant for income while the family effect was dominant for wealth.

download in pdf format
   (678 K)

download in djvu format
   (450 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1425

Published: Kearl, J. R. and Clayne L. Pope, "Observable Family and Individual Contributions to the Distributions of Income and Wealth," Journal of Labor Economics, July 1987.

Users who downloaded this paper also downloaded* these:
Kearl and Pope w1146 Life-Cycles in Income and Wealth
Gustman and Steinmeier w3593 The Effects of Pensions and Retirement Policies on Retirement in Higher Education
Krishna w1535 Tariffs vs. Quotas with Endogenous Quality
Galenson and Pope Precedence and Wealth: Evidence from Nineteenth-Century Utah
Kearl w1747 The Covariance Structure of Earnings and Income, Compensatory Behavior and On-the-Job Investments
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us