Mitnik, Pablo. 2018.
“Two-Sample Estimation of the Intergenerational Elasticity of Expected Income:
The IGETWO Command.” Stanford Center on Poverty and Inequality Working Paper.

**Abstract**

Due
to data constraints, the intergenerational income elasticity (IGE)—the
workhorse measure of economic mobility—has very often been estimated with
short-run income measures drawn from two independent samples and using the
Two-Sample Two-Stage Least Squares (TSTSLS) estimator. The IGE conventionally
estimated in the mobility literature, however, has been widely misinterpreted
as pertaining to the conditional expectation of children’s income when in fact
it pertains to its conditional geometric mean. In line with recent work, this
article focuses almost exclusively on the IGE of expected income. It (a)
proposes that estimation of this IGE in the two-sample context be based on a
recently advanced two-sample generalized method of moments (GMM) estimator of
the exponential regression model, and (b) introduces the user-written program **igetwos**, which
implements that estimator as well as a GMM version of the TSTSLS estimator. The
new program allows to use Stata to estimate both the IGE of the expectation and
the IGE of the geometric mean when the income information for parents and
children is available in two independent samples..