The Dual Impact of Women’s Labor Market Gains on Absolute Upward Mobility

This study investigates the relationship between women's increased labor market participation and absolute upward mobility, measured as the share of households earning more than their parents. The transition from one- to two-earner households provides additional household incomes, thereby temporarily increasing absolute mobility.

However, the new framework presented in this paper reveals conflicting effects of women's increasing labor force participation on absolute mobility. As women realize their labor market potential, this is accompanied by both increasing the correlation in earnings across spouses and rising intergenerational correlation of women's earnings. The former has a negative effect on absolute mobility, while the latter has a positive effect.

Using Swedish administrative data from tax records on cohorts born between 1958 and 1977 and their parents, we analyze how upward mobility in family income has evolved through each of the framework's channels and find that increasing spousal correlation in earnings has decreased absolute mobility by 8 percentage points.

Joint: Erik Liss & Per Engzell

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