Breaking the Links: Natural Resource Booms and Intergenerational Mobility

Abstract This paper demonstrates that a large economic shock such as an oil boom increases intergenerational earnings mobility among directly affected men, mostly through increased bottom-up mobility, but not for women. Preexisting local differences in mobility or shifts in the earnings distributions do not drive these findings. Instead, changes in relative earnings paid to workers with different skills offer the best explanation. Moreover, we document that intergenerational mobility is significantly higher for the indirectly affected third generation and that the oil boom broke the earnings link between first- and third-generation men.