In this paper the authors explore the impact of attrition among participants of the Michigan Panel Study of Income Dynamics (PSID) on estimates based on data from the second generation. The study complements the authors' companion paper on attrition among respondents who were adults in 1968. They focus their attention on two different types of questions about the second generation. The first set of questions explores the impact of attrition on the mean characteristics (or, more generally, the marginal distribution of the characteristics) of the nonattriting second generation. To answer these questions they rely primarily on a comparison of the 1989 characteristics of surviving children in the PSID (who were 20 to 38 by 1989) to a similar sample drawn from the 1989 Current Population Survey. The second set of questions that the authors address focuses on the relationship between adult outcomes of the second generation and their parents. For example, does attrition bias estimates of the intergenerational correlation in earnings, education or welfare participation? The availability of data in the PSID spanning more than one generation has spawned numerous studies examining intergenerational correlations in income (Behrman and Taubman 1990; Corcoran, Gordon, Laren, and Solon 1992; Couch and Dunn 1996; Solon 1992), welfare (Antel 1992; Duncan, Hill, and Hoffman 1988; Gottschalk, 1995) and economic status (Solon, Corcoran, Gordon, and Laren 1991). These studies use direct observations not only on the parents' outcomes but also the children's outcome when they become adults.
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