%0 Report
        %A Stuhler, Jan
        %T Mobility Across Multiple Generations: The Iterated Regression Fallacy
        %D 2012
        %8 2012 Dec
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 7072
        %U https://www.iza.org/index.php/publications/dp7072
        %X Conflicting views about the degree of long-run mobility across multiple generations persist because direct empirical evidence is scarce. Predictions are instead routinely derived by iteration of intergenerational measures, a procedure which implies high long-run mobility even when intergenerational mobility is low. However, the assumption that regression implies perpetual regression is a statistical fallacy.
I examine this fallacy, its historical background, and its prevalence. I then present various simple models of intergenerational transmission to consider how the relation between intergenerational and multigenerational mobility is affected by elements of the transmission process. I discuss the role of market luck and indirect transmission; the multiplicity of skills; the role of grandparents; and the causal effect of parental income. The direction of bias depends on modeling assumptions, but elementary properties of the transmission process imply that long-run mobility will likely be lower, possibly much lower, than predictions from intergenerational evidence suggest.
        %K intergenerational mobility
%K multigenerational mobility
%K intergenerational income elasticity
%K regression fallacy