Discussion Papers no. 897

Spillover bias in multigenerational income regressions

Intergenerational persistence estimates are susceptible to several well-documented biases arising from income measurement, and it has become standard practice to construct income measures to mitigate these.

However, remaining bias can lead to a spurious grandparent coefficient estimate in multigenerational regressions, a recent focus of the mobility literature. We show with theory and simulations that even using a 30-year income average can result in a small positive spurious grandfather coefficient estimate. We further propose an IV approach, showing that it is not susceptible to this spillover bias in simplified settings and that it can provide bounds on the parameters in a more general scenario. With administrative data from Norway, we reveal a positive spillover bias in the grandfather coefficient estimates, and the combined evidence from our OLS and IV approaches suggest the preferred small positive OLS estimate could still be upward biased.

About the publication


Spillover bias in multigenerational income regressions


Jørgen Modalsli, Kelly Vosters

Series and number

Discussion Papers no. 897


Statistisk sentralbyrå


Discussion Papers



Number of pages


About Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.