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INTERGENERATIONAL MOBILITY AND SOCIAL STATUS IN A MODEL WITH HUMAN CAPITAL INVESTMENTS AND TRAIT INHERITANCE

Published online by Cambridge University Press:  16 December 2019

Rainer Andergassen  and
Franco Nardini
Rainer Andergassen
Affiliation:
University of Bologna
Franco Nardini*
Affiliation:
University of Bologna
*
Address correspondence to: Franco Nardini, Department of Mathematics, University of Bologna, Piazza di Porta San Donato 5, 40126 Bologna, Italy. Phone: +39 (051) 209 4341. Fax: +39 (051) 209 4367. e-mail: [email protected].
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Abstract

We study a model in which parents care about the economic and social status of their offspring. The chances of an individual achieving social status depends on innate traits, that is, IQ, ability, social and cultural environment, and other price-insensitive endowments, passed on by their parents, on human capital investments and on chance events. Parents can, through human capital investments, increase the offspring’s probability of climbing the social ladder, although they cannot borrow against the children’s perspective earning. Consequently, income and trait heterogeneity are the determinants of unequal opportunities and of intergenerational mobility.

Keywords

Intergenerational MobilityStatus CompetitionInequalityHuman CapitalInnate Traits
Type
Articles
Information
Macroeconomic Dynamics , Volume 25 , Issue 3 , April 2021 , pp. 776 - 794
Copyright
© Cambridge University Press 2019

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Footnotes

The authors would like to thank three anonymous referees and all the participants of NED 2017 for their comments and remarks.

References

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