How persistent are economic gaps across ethnicities? The convergence of ethnic gaps through the third generation of immigrants is difficult to measure because few datasets include grandparental birthplace. I overcome this limitation with a new three-generational dataset that links immigrant grandfathers in 1880 to their grandsons in 1940. I find that the persistence of ethnic gaps in occupational income is 2.5 times stronger than predicted by a standard grandfather-grandson elasticity. While part of the discrepancy is due to measurement error attenuating the grandfather-grandson elasticity, mechanisms related to geography also partially explain the stronger persistence of ethnic occupational differentials.
That is the abstract of a piece by Zachary Ward, from American Economic Journal: Applied Economics. In a number of regards this paper goes well beyond the previous literature. Here is another interesting sentence:
…I find that 51 percent of initial ethnic gaps in occupational income remained after three generations.
The author also notes:
Rather than argue for an ethnic-specific causal mechanism, I instead point to measurement error and geography as key reasons for the stronger persistence of ethnic differentials across three generations.
I am not so convinced, as where you choose to live is endogenous to your expected labor market quality. I am somewhat more persuaded by this point:
…the ethnic mean provides more information about the father’s true occupational status.
Iin other words, what appears to be an influence of ethnicity might instead be a transmission channel through the background of one’s own father.
At times the author seems naive, at other times Straussian, or maybe just afraid? To be clear, I am myself an extreme culturalist, and that is not a Straussian remark. This is in any case a major contribution to a contentious debate.