Returns to Skills, Technological Change, and Intergenerational Mobility

Jinpeng Shi, George Mason University

How does technological change influence economic opportunities across generations? While existing literature documents that technological change has profound effects on earnings distributions and occupational skill requirements, much less is known about how technological change affects intergenerational income persistence. This paper develops a framework that conceptualizes technological change as a process of skill re-evaluation across cohorts. The model shows how changes in the returns to skills can either strengthen or weaken intergenerational income persistence, providing a mechanism linking technological change to long-run mobility outcomes. We then test the model’s predictions using linked census data and nationally representative surveys spanning several decades. Our preliminary evidence suggests that technological change initially boosts intergenerational mobility by increasing skill demand; however, this effect fades over time as skill supply adjusts to shifts in relative returns. These findings contribute to ongoing policy debates on how to ensure that future technological change generates broadly shared economic gains.

No extended abstract or paper available

 Presented in Session 54. Labor Stratification, Migration, and Political Economy