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Institutional Affiliation: Federal Reserve Board
|Human Capital, Heterogeneity, and Estimated Degrees of Intergenerational Mobility|
with Casey B. Mulligan: w7678
Some of the important implications of the parental investment model of intergenerational mobility have been derived under the assumption that parental income is the main source of heterogeneity. We explicitly model the variability and inheritability of innate' earnings ability and the variability of tastes, showing how they affect observed degrees of intergenerational consumption and earnings mobility. Heterogeneity increases the difficulty of detecting the existence of borrowing constrained families. Conversely, the presence of heterogeneity means that economic and linear statistical models of inheritance generate similar intergenerational data on consumption and earnings. In this sense, our findings offer some support for Goldberger's (1989) criticism of human capital models of inherit...
Published: Han, Song and Casey B. Mulligan. "Human Capital, Heterogeneity And Estimated Degrees Of Intergenerational Mobility," Economic Journal, 2001, v111(470,Apr), 207-243. citation courtesy of