Open Access

Mobility, Government Policy


The intergenerational impact of public transfers on the economic and social outcome in a society is discussed ambiguously. A considerable amount of research generally found that parental welfare participation may encourage the welfare dependency of future generations and thus perpetuate generational poverty cycles (Gottschalk 1992, Vartanian 1999, Pepper 2000, Page 2004). Public transfers prevent persons from developing their resources or to take advantage of existing opportunities. Human capital such as education and work experience is not valued, and there is little motivation to pursue full-time employment (Hill and Duncan 1987, Mayer 1997, Corak and Heisz 1999). At the other side public transfers are said to result in an overall improvement in the living standards of the poor (Ellwood and Summers 1986). In this view, public transfers and redistributive taxes might be dedicated to narrow the gap between the income of the parents so that the incomes of the children converge to the mean more quickly (Corak 2006). The paper aims to analyze the implications of public transfers on the intergenerational income inequality and poverty trends in Germany and the United States, two countries differing concerning welfare policy regimes, labor market settings and family role models. We analyze the pre- and post-government income of parent-child pairs in different time windows to address to non-linearities in the intergenerational income mobility (Hyson 2003


their socioec, post-government income position