| Summary: | My dissertation addresses questions in two topic areas, intergenerational mobility and migration. I first study the dynamic response of income mobility to structural changes in a model of intergenerational transmission. I illustrate that mobility today depends on past policies and institutions, such that a decline in mobility may reflect past gains rather than a recent deterioration of “equality of opportunity”. How to measure income mobility is addressed in the next chapter, in which I document that heterogeneity in the shape of income profiles generates large life-cycle biases, which cannot be eliminated with standard methods used in the current literature. Finally, in the fourth chapter I study how elements of the transmission process affect the relation between mobility over two generations and the long-run persistence of economic status within families. I provide various arguments why long-run mobility is likely lower than predictions from intergenerational evidence suggest. In the final chapter I analyse the effect of migration on labor markets. Triggered by the fall of the iron curtain, Germany experienced a sudden inflow of Czech workers that reached a local employment share of up to ten percent. I exploit this natural experiment to assess how immigration affects native workers, and to examine the mechanisms by which labor markets adjust. I find a strong and rapid response in both native wages and employment, and document substantial heterogeneity across age groups: native employment decreases most strongly among older workers, even though their wages are less affected than for other age groups. This finding suggests that the elasticity of labor supply differs across demographic groups, with important implications for the analysis of responses to labor supply shocks. When distinguishing between the different types of adjustment, I find that native employment decreases predominantly through diminished inflows into work, less so through outflows into non-employment.
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