Journal ArticleDOI
Intergenerational income immobility in Finland: contrasting roles for parental earnings and family income
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In this paper, an intergenerational model is developed, nesting heritable earning abilities and credit constraints limiting human capital investments in children, showing that the parameter of inherited earning ability is tiny.Abstract:
An intergenerational model is developed, nesting heritable earning abilities and credit constraints limiting human capital investments in children. Estimates on a large, Finnish data panel indicate very low transmission from parental earnings, suggesting that the parameter of inherited earning ability is tiny. Family income, particularly during the phase of educating children, is shown to be much more important in shaping children’s lifetime earnings. This influence of parental incomes on children’s earnings rises as the children age because the returns to education rise. Despite Finland’s well-developed welfare state, persistence in economic status across generations is much higher than previously thought.read more
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Parental Priorities and Economic Inequality
TL;DR: Mulligan as discussed by the authors investigated the transmission of economic status from one generation to the next by constructing an economic model of parental preferences, arguing that parental actions are some of the most important sources of wealth inequality.
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Do Poverty Traps Exist? Assessing the Evidence
Aart Kraay,David McKenzie +1 more
TL;DR: The concept of a poverty trap at the level of national economies is related to, and sometimes based on, microeconomic foundations that argue for the existence of poverty traps at the household level as discussed by the authors.
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The Intergenerational Persistence of Human Capital: An Empirical Analysis of Four Generations
TL;DR: In this paper, the authors investigated to what extent estimates based on income data from two generations accurately predicted earnings persistence beyond two generations and also did a similar analysis for intergenerational persistence in educational attainments.
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Long-Term Intergenerational Persistence of Human Capital: An Empirical Analysis of Four Generations
TL;DR: This paper used a Swedish data set that links individual measures of lifetime earnings for three generations and data on educational attainment for four generations to find that estimates obtained from data on two generations severely underestimate long-run intergenerational persistence in both labor earnings and educational attainments.
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Journal ArticleDOI
Testing for unit roots in heterogeneous panels
TL;DR: In this article, a unit root test for dynamic heterogeneous panels based on the mean of individual unit root statistics is proposed, which converges in probability to a standard normal variate sequentially with T (the time series dimension) →∞, followed by N (the cross sectional dimension)→∞.
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The causal effect of education on earnings
TL;DR: This paper surveys the recent literature on the causal relationship between education and earnings and concludes that the average (or average marginal) return to education is not much below the estimate that emerges from a standard human capital earnings function fit by OLS.
Book
Human capital and the rise and fall of families
Gary S. Becker,Nigel Tomes +1 more
TL;DR: In this paper, a model of the transmission of earnings, assets, and consumption from parents to descendants is developed, assuming utility-maximizing parents who are concerned about the welfare of their children.
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An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility
Gary S. Becker,Nigel Tomes +1 more
TL;DR: The theory of inequality and intergenerational mobility presented in this paper assumes that each family maximizes a utility function spanning several generations, which depends on the consumption of parents and on the quantity and quality of their children.
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Intergenerational Income Mobility in the United States
TL;DR: For example, this article showed that the intergenerational correlation in long-run income is at least 0.4, indicating dramatically less mobility than suggested by earlier research, indicating less mobility.