Intergenerational Transmission Of Human Capital Research Articles

Empirical nonlinearities and neighbourhood effects in the intergenerational transmission of human capital

This letter reports an empirical analysis of individuals' education as a function of their parents' education and of education in the census tract of their upbringing. The analysis is conducted with data from the Panel Study of Income Dynamics, including confidential geocoded data that links individuals to contextual data from the 1980 and 1990 US Census. The results validate those of Kremer's on the role of neighbourhood effects, but also confirm, using both parametric and nonparametric methods, that parents' education and neighbours' education have nonlinear effects that are broadly consistent with theoretical predictions.

Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital

Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital

Slavery and the Intergenerational Transmission of Human Capital

How much do sins visited upon one generation harm that generation's future sons, daughters, grandsons and granddaughters? I study this question by comparing outcomes for former slaves and their children and grandchildren to outcomes for free blacks (pre-1865), and their children and grandchildren. The outcome measures include literacy, whether a child attends school, whether a child lives in a female headed household, and two measures of adult occupation. Using a variety of different comparisons, (e.g. within versus across regions) I find that it took roughly two generations for the descendants of slaves to catch up to the descendants of free black men and women. This finding is consistent with modern estimates and interpretations of father-son correlations in income and socioeconomic status. The data used are from the 1880 and 1920 1 percent (IPUMS) samples, a 100 percent sample of the 1880 Census and a smaller data set in which I link families in the 1920 IPUMS back to the father's family in a 100% sample of the 1880 Census. These latter data sets are derived from an electronic version of the 1880 Census recently compiled and released by the Mormon Church with assistance from the Minnesota Population Center.

Slavery and the Intergenerational Transmission of Human Capital

How much do sins visited upon one generation harm that generation's future sons, daughters, grandsons, and granddaughters? I study this question by comparing outcomes for former slaves and their children and grandchildren to outcomes for free blacks (pre-1865) and their children and grandchildren. The outcome measures include literacy, whether a child attends school, months spent in school, years of schooling, and two measures of adult occupation. Using a variety of different comparisons (for example, within versus across regions) I find that it took roughly two generations for the descendants of slaves to catch up to the descendants of free black men and women, for those outcomes that I observe. In other words, by 1920 the remaining legacy of slavery is such that all blacks are affected equally, not just the actual descendants of slaves. There is some evidence that this convergence was facilitated by intermarriage among slave and free families. The finding of convergence is consistent with modern estimat...

Taxation and the intergenerational transmission of human capital

How do taxes affect human capital accumulation? This question has been studied extensively in the context of two model classes: overlapping generations (OLG) and infinite horizon (IH) models. These embody very different assumptions about the intergenerational transmission of physical and human capital. OLG models typically abstract from intergenerational linkages, while IH models implicitly assume that new agents inherit human and physical capital from their parents. This paper investigates how such differences in intercohort persistence affect the responsiveness of human capital to taxation. A model is developed that nests OLG and IH models as special cases. Analytical expressions for the steady state tax elasticities of human capital are derived for versions of the model with varying degrees of persistence. The main finding is that higher persistence increases the responsiveness of human capital to both wage and capital income taxes. As a result, IH models generate larger tax elasticities than do OLG models with incomplete persistence, even if cohorts are altruistically linked. In a calibrated version of the model, moving from no persistence to complete persistence increases the tax elasticity of human capital by a factor between two and three.

Household environmental protection and the intergenerational transmission of human capital

The estimated discount rate of parents is used to test a choice-based intergenerational model of the contribution of environment to the cognitive skills of a child of a given endowment. A lower parental discount rate is shown to imply higher cognitive skills of the young child. In the context of the model, estimates also imply that environmental conditions and human capital formation are not separable. Lesser environmental quality raises the costs of human capital formation in children and lesser human capital reduces parents' demand for environmental quality. Environmental quality differences among families, just like genetic differences, may persist across generations.

Taxation and the Intergenerational Transmission of Human Capital

Taxation and the Intergenerational Transmission of Human Capital

How Do Taxes Affect Human Capital? The Role of Intergenerational Mobility

Existing studies of the effects of taxation on human capital accumulation are based on models with extreme intergenerational mobility properties. One strand of the literature uses life-cycle models, in which intergenerational mobility is perfect. Another strand relies on models of infinitely lived dynasties, in which intergenerational persistence is perfect. Hendricks (1999a) shows that the predicted tax effects differ in important ways across the two model classes, in large part due to the extreme mobility properties implied by standard infinite horizon and life-cycle models. It is therefore important to study the effects of taxes in environments with realistic intergenerational mobility properties. To this end, this paper develops an overlapping generations model of taxation and human capital accumulation which matches features of the intergenerational transmission of earnings and education estimated from a panel of U.S. workers. The main finding is that abstracting from the intergenerational transmission of human capital, as is typically done in life-cycle models, has little impact on the predicted effects of tax reforms. In contrast, models with extreme degrees of intergenerational persistence, as implicit in infinite horizon models, generate very different outcomes. This finding cautions against the use of infinite horizon models of human capital accumulation.