March 2026

IZA DP No. 18422: Intergenerational Earnings Persistence Across Ethnicities

David C. Maré, Omoniyi Alimi

We estimate intergenerational earnings persistence for 6 ethnic groups using linked administrative data for approximately 288,000 individuals in New Zealand born between 1986 and 1992. Linking data from administrative datasets, censuses, and surveys, we focus on 198,000 parent-child pairs actively participating in the labour market. Our preferred IV rankrank slope which adjusts for earnings measurement error is 0.27, suggesting that children inherit roughly one-quarter of parental earnings advantage or disadvantage. We analyse relative and absolute persistence, variations by ethnicity and gender, and explore the role of observable characteristics. Finally, we discuss underlying factors influencing persistence, including the potential role of discrimination and racism in labour markets and broader society.