This study used data from the Panel Study of Income Dynamics (PSID) to assess the extent to which economic status is transmitted from one generation to the next, focusing on whether the effect of parental income on sons' family income and wages changed for cohorts between 1949 and 1965. The PSID is a longitudinal data set initiated with a core sample of approximately 4,800 families in 1968. This study includes all males born between 1949-65 whose parents responded to the survey and who had positive income or wages when they were 30 years old. Results indicated that the effect of parental income on sons' family income and wages at age 30 declined. This was largely because the effect of parental income on sons' years of schooling declined. The decline in the effect of parental income is not part of an overall decline in the effect of family background. The effect of parents' education on sons' economic status did not decline and may have increased; however, the effect of other family background characteristics hardly changed. The researchers suggest that the decline in the effect of parental income on sons' income may be due to the increase in government investment in children, especially in their educational attainment. (SM)