Destined for Deprivation: Human Capital Formation and Intergenerational Poverty in Nineteenth-Century England

Abstract

A model illustrates the intergenerational transmission of poverty through the effects of shocks to family income on children's general education and health and subsequently on their capacity to work and earn as adults. Evidence for 19th-century Britain shows that being fatherless, and so likely poor, had an adverse effect on children's human capital acquisition. However, policy intervention in the form of the Old Poor Law blocked the transmission of poverty and avoided permanent pauperism. Even at an early stage of development, redistribution emerges as a positive contribution to economic growth, not a luxury that poor countries can ill afford.