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Business Cycles And American Dreams: (Dis) Aggregate Fluctuations And Intergenerational Mobility, Kailie Drescher

Electronic Theses and Dissertations

In this thesis, I test my central hypothesis that aggregate economic fluctuations (business cycles) affect intergenerational economic mobility (American dreams). I exploit heterogeneity across U.S. state-level business cycles. I argue that these cycles impose countercyclical credit constraints on households that rely on credit to invest in the human capital of their children. Thus, credit constraints effectively limit the skills and expected earnings of children. I focus on an empirical measure of absolute mobility that Chetty et al. (2017) propose: the rate of absolute income mobility, which measures the fraction of adult children who earn more than their parents earned, conditional …