Hostname: page-component-586b7cd67f-dlnhk Total loading time: 0 Render date: 2024-11-22T19:51:34.741Z Has data issue: false hasContentIssue false
  • English
  • Français

INTERGENERATIONAL MOBILITY IN EDUCATION AND OCCUPATION

Published online by Cambridge University Press:  17 May 2018

Jaime Alonso-Carrera ,
Jordi Caballé  and
Xavier Raurich
Jaime Alonso-Carrera
Affiliation:
Universidade de Vigo
Jordi Caballé*
Affiliation:
Universitat Autònoma de Barcelona and Barcelona GSE
Xavier Raurich
Affiliation:
Universitat de Barcelona
*
Address correspondence to: Jordi Caballé, Universitat Autònoma de Barcelona, Departament d'Economia i d'Història Econòmica, Edifici B., 08193Bellaterra, Barcelona, Spain; e-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

We build a model that, according to the empirical evidence, gives rise to oscillations in wealth within a dynasty while keeping intergenerational persistence in education attainment. We propose a mechanism based on the interaction between wealth and effort as suggested by the Carnegie conjecture, according to which wealthier individuals devote less effort in their job occupations than poorer. Oscillations in wealth arise from changes in the occupation chosen by different generations of the same dynasty as a response to both inherited wealth and college premium. Our mechanism generates a rich social stratification with several classes in the long run due to the combination of different levels of education and occupation types. Furthermore, we generate a large mobility in wealth among classes even in the long run. Our model highlights the role played by the minimum cost on education investment, the borrowing constraints, and the complementarity between education and occupational effort.

Keywords

Intergenerational MobilityEducationOccupation
Type
Articles
Information
Macroeconomic Dynamics , Volume 24 , Issue 2 , March 2020 , pp. 291 - 326
Copyright
© Cambridge University Press 2018

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Financial support from the Government of Spain/FEDER through Grants ECO2015-66701, ECO2015-67602, and ECO2015-68367; the RecerCaixa program, the French National Research Agency through A*MIDEX project ANR-11-IDEX-0001-02; the Severo Ochoa Program through Grant SEV-2015-0563; and the Generalitat of Catalonia through Grant 2017-SGR-1765 is gratefully acknowledged. This paper has benefited from comments by participants in the Summer Forum of the Barcelona GSE, ASSET meeting, AMSE workshop in Growth and Development, Navarre-Basque Country Macroeconomics workshop, Madrid Mobility workshop, Regional Science Association meeting, and the Symposium of the Spanish Economic Association.

References

REFERENCES

Abel, Andrew B. (1985) Precautionary saving and accidental bequests. American Economic Review 75, 777–791.Google Scholar
Acemoglu, Daron and Autor, David H. (2011) Skills, tasks and technologies: Implications for employment and earnings. In Ashenfelter, Orley and Card, David (eds.), Handbook of Labor Economics, vol. 4, part B, pp. 1043–1171. Amsterdam: Elsevier.Google Scholar
Aguiar, Mark and Hurst, Erik (2007) Measuring trends in leisure: The allocation of time over five decades. Quarterly Journal of Economics 122, 969–1006.CrossRefGoogle Scholar
Alonso-Carrera, Jaime, Caballé, Jordi, and Raurich, Xavier (2012) Fiscal policy, composition of intergenerational transfers. Journal of Economic Behavior and Organization 84, 62–84.CrossRefGoogle Scholar
Alonso-Carrera, Jaime, Caballé, Jordi, and Raurich, Xavier (2016) Intergenerational Mobility, Occupational Decision and the Distribution of Wages. Barcelona GSE working papers series 945.Google Scholar
Autor, David H. and Dorn, David (2013) The growth of low-skill service jobs and the polarization of the US labor market. American Economic Review 103, 1553–1597.CrossRefGoogle Scholar
Autor, David H., Katz, Lawrence F., and Kearney, Melissa S. (2006) The polarization of the U.S. labor market. American Economic Review 96, 189–194.CrossRefGoogle Scholar
Becker, Gary S. and Tomes, Nigel (1986) Human capital and the rise and fall of families. Journal of Labor Economics 4, S1–S38.CrossRefGoogle ScholarPubMed
Behrman, Jere R., Pollak, Robert A., and Taubman, Paul (1995) The wealth model: Efficiency in education and distribution in the family. In Behrman, Jere R., Pollak, Robert A., and Taubman, Paul (eds.), From Parent to Child: Intra-household Allocations and Intergenerational Relations in the United States, pp. 138–182. Chicago, IL: University of Chicago Press.Google Scholar
Behrman, Jere R., Gaviria, Alejandro, Székely, Miguel, Birdsall, Nancy, and Galiani, Sebastián (2001) Intergenerational mobility in Latin America. Economía 2, 1–44.CrossRefGoogle Scholar
Bø, Erlend E., Halvorsen, Elin, and Thoresen, Thor O. (in press) Heterogeneity of the Carnegie Effect. Journal of Human Resources. doi:10.3368/jhr.54.3.0915.7366R1Google Scholar
Blanden, Jo (2013) Cross-country rankings in intergenerational mobility: A comparison of approaches from economics and sociology. Journal of Economic Surveys 27, 38–73.CrossRefGoogle Scholar
Brown, Jeffrey R., Coile, Courtney C., and Weisbenner, Scott J. (2010) The effect of inheritance receipt on retirement. Review of Economics and Statistics 92, 425–434.CrossRefGoogle Scholar
Carnegie, Andrew (1962) The Gospel of Wealth and other Timely Essays. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Checchi, Daniele, Ichino, Andrea, and Rustichini, Aldo (1999) More equal but less mobile? Education financing and intergenerational mobility in Italy and in the US. Journal of Public Economics 74, 351–393.CrossRefGoogle Scholar
Chevalier, Arnaud, Denny, Kevin, and McMahon, Dorren (2009) A multi-country study of inter-generational educational mobility. In Dolton, Peter, Asplund, Rita, and Barth, Erling (eds.), Education and Inequality Across Europe. Cheltenham, UK and Northampton, USA: Edward Elgar.Google Scholar
Cochell, Perry L. and Zeeb, Rodney C. (2005) Beating the Midas Curse. Portland, OR: Heritage Institute Press.Google Scholar
Cox, Donald (2014) Inheritance, Bequests, and Labor Supply. IZA World of Labor.CrossRefGoogle Scholar
Degan, Arianna and Thibault, Emmanuel (2016) Dynastic accumulation of wealth. Mathematical Social Sciences 81C, 66–78.CrossRefGoogle Scholar
Doepke, Matthias and Zilibotti, Fabrizio (2008) Occupational choice and the spirit of capitalism. Quarterly Journal of Economics 123, 747–793.CrossRefGoogle Scholar
Dynarski, Susan (2002) The behavioural and distributional implications of aid for College. American Economic Review (Papers and Proceedings) 92, 279–285.CrossRefGoogle Scholar
Eckstein, Zvi and Zilcha, Itzhak (1994) The effects of compulsory schooling on growth, income distribution and welfare. Journal of Public Economics 54, 339–359.CrossRefGoogle Scholar
Elinder, Mikael, Erixson, Oscar, and Ohlsson, Henry (2012) The impact of inheritances on Heirs' labor and capital income. B.E. Journal of Economic Analysis and Policy 12, 1–35.CrossRefGoogle Scholar
Galor, Oded and Moav, Omer (2004) From physical to human capital accumulation: Inequality and the process of development. Review of Economic Studies 71, 1001–1026.CrossRefGoogle Scholar
Galor, Oded and Moav, Omer (2006) Das Human-Kapital: A theory of the demise of the class-structure. Review of Economic Studies 73, 85–117.CrossRefGoogle Scholar
Galor, Oded and Zeira, Joseph (1993) Income distribution and macroeconomics. Review of Economic Studies 60, 35–52.CrossRefGoogle Scholar
Gradstein, Mark (2008) Endogenous Reversals of Fortune. IZA discussion paper 469.Google Scholar
Hertz, Tom, Jayasundera, Tamara, Piraino, Patrizio, Selcuk, Sibel, Smith, Nicole, and Verashchagina, Alina (2008) The inheritance of educational inequality: International comparisons and fifty-year trends. The B.E. Journal of Economic Analysis and Policy 7, Article 10.CrossRefGoogle Scholar
Holtz-Eakin, Douglas, Joulfaian, David, and Rosen, Harvey S. (1993) The Carnegie conjecture: Some empirical evidence. Quarterly Journal of Economics 108, 413–435.CrossRefGoogle Scholar
Holtz-Eakin, Douglas, Joulfaian, David, and Rosen, Harvey S. (1994) Entrepreneurial decisions and liquidity constraints. RAND Journal of Economics 25, 334–347.CrossRefGoogle Scholar
Joulfaian, David and Wilhelm, Mark O. (1994) Inheritance and labor supply. Journal of Human Resources 29, 1205–1234.CrossRefGoogle Scholar
Joulfaian, David and Wilhelm, Mark O. (2006) Inheritance and Saving. NBER working paper 12569.CrossRefGoogle Scholar
Karasiotou, Pavlina (2012) Education and the labor market. Reflets et Perspectives de la Vie Économique 51, 51–72.CrossRefGoogle Scholar
Keane, Michael P. (2002) Financial aid, borrowing constraints, and college attendance: Evidence from structural estimates. American Economic Review (Papers and Proceedings) 92, 293–297.CrossRefGoogle Scholar
Kindermann, Fabian, Mayr, Lukas, and Sachs, Dominik (2017) Inheritance Taxation and Wealth Effects on the Labor Supply of Heirs. Society of Economic Dynamics, 2017 Meeting Papers 1046.Google Scholar
Prescott, Edward C. (2004) Why do Americans work so much more than Europeans? Federal Reserve of Minneapolis Quarterly Review 28, 2–13.Google Scholar
Yaari, Menahem E. (1965) Uncertain lifetime, life insurance, and the theory of the consumer. Review of Economic Studies 32, 137–150.CrossRefGoogle Scholar
Zilcha, I. (2003) Intergenerational transfers, production and income distribution. Journal of Public Economics 87, 489–513.CrossRefGoogle Scholar
Zylberberg, Y. (2013) Dynastic Income Mobility. Manuscript.Google Scholar