Work

On the Intergenerational Transmission of Economic Status

Year: 2018

Type: article

Abstract: We present a model in which human capital investments occur over the life cycle and across generations, à la Becker and Tomes. The human capital technology features multiple stages of childhood investments, college, and life cycle accumulation. The model can explain a wide range of intergenerational relationships while remaining empirically consistent with cross-sectional inequality. Much of the latter is determined by early investments in children, so that borrowing constraints faced by young parents are important for understanding the persistence of economic status across generations. Education subsidies, especially early on, can significantly reduce the intergenerational persistence of economic status.

Source: Journal of Political Economy

DOI: 10.1086/700765

Authors: Sang Yoon (Tim) Lee, Ananth Seshadri

Institutions: Queen Mary University of London, Centre for Economic Policy Research, National Bureau of Economic Research, University of Wisconsin–Madison

Language: English

Topic: Intergenerational and Educational Inequality Studies

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDG: Reduced inequalities

Open Access status: green

Funders: National Institute on Aging, Eunice Kennedy Shriver National Institute of Child Health and Human Development