Relative intergenerational mobility declined for cohorts born around 1960 compared to those born around 1950. The former entered the labor market after the rise in inequality around 1980 while the latter entered the labor market earlier. We show that the rank-rank slope rose from 0.25 to 0.36 and the intergenerational elasticity increased from 0.28 to 0.45. These increases are more pronounced for men than for women. Increases in returns to schooling and in the gradient in the likelihood of marriage by parent income are contributors to increased intergenerational persistence.

Previous studies, relying on short-term averages of fathers' earnings, have estimated the intergenerational elasticity (IGE) in earnings to be approximately 0.4. Due to persistent transitory fluctuations, these estimates have been biased down by approximately 30% or more. Using administrative data containing the earnings histories of parents and children, the IGE is estimated to be around 0.6. This suggests that the United States is substantially less mobile than previous research indicated. Estimates of intergenerational mobility are significantly lower for families with little or no wealth, offering empirical support for theoretical models that predict differences due to borrowing constraints.