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Transmission of Human Capital across Four Generations: Intergenerational Correlations and a Test of the Becker-Tomes Model

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  • Lindahl, Mikael

    ()
    (Department of Economics)

  • Palme, Mårten

    ()
    (Stockholm University)

  • Sandgren Massih, Sofia

    ()
    (Department of Economics)

  • Sjögren, Anna

    ()
    (IFAU)

Abstract

Most previous studies on intergenerational transmission of human capital are restricted to two generations - between the parent and the child generation. In this paper we investigate if there is an independent effect of the grandparent and the great grandparent generations in this process. We use a dataset where we are able to link individual measures of life time earnings for three generation and data on educational attainments of four generations. We first do conventional regressions and transition matrices for life time earnings measures and educational attainments adding variables for the grandparent and great grandparent generations, respectively. We find that grandparents and even great grandparents significantly influence earnings and education. We then estimate the so called Becker-Tomes model using the educational attainment of the great grandparent generation as an instrumental variable. We fail to find support for the models predictions.

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Bibliographic Info

Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2011:18.

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Length: 27 pages
Date of creation: 18 Dec 2011
Date of revision:
Handle: RePEc:hhs:uunewp:2011_018

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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
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Web page: http://www.nek.uu.se/
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Keywords: Intergenerational income mobility; earnings distribution; income inequality;

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  1. Helena Holmlund & Mikael Lindahl & Erik Plug, 2010. "The Causal Effect of Parents' Schooling on Children's Schooling - A Comparison of Estimation Methods," CESifo Working Paper Series 3234, CESifo Group Munich.
  2. Sandra E. Black & Paul J. Devereux, 2010. "Recent Developments in Intergenerational Mobility," Working Papers 201025, Geary Institute, University College Dublin.
  3. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, vol. 96(4), pages 1308-1320, September.
  4. Bruce Sacerdote, 2004. "What Happens When We Randomly Assign Children to Families?," NBER Working Papers 10894, National Bureau of Economic Research, Inc.
  5. Costas Meghir & Mårten Palme, 2005. "Educational Reform, Ability, and Family Background," American Economic Review, American Economic Association, vol. 95(1), pages 414-424, March.
  6. Palme, Mårten & Sandgren, Sofia, 2007. "Parental Income, Lifetime Income and Mortality," Research Papers in Economics 2007:4, Stockholm University, Department of Economics.
  7. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2009. "Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932-1968," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 671-680, June.
  8. Erik Plug & Wim Vijverberg, 2005. "Does Family Income Matter for Schooling Outcomes? Using Adoptees as a Natural Experiment," Economic Journal, Royal Economic Society, vol. 115(506), pages 879-906, October.
  9. Chul-In Lee & Gary Solon, 2006. "Trends in Intergenerational Income Mobility," NBER Working Papers 12007, National Bureau of Economic Research, Inc.
  10. Gary S. Becker & Kevin M. Murphy & Robert Tamura, . "Human Capital, Fertility, and Economic Growth," University of Chicago - Population Research Center 90-5a, Chicago - Population Research Center.
  11. Björklund, Anders & Lindahl, Mikael & Plug, Erik, 2005. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," IZA Discussion Papers 1739, Institute for the Study of Labor (IZA).
  12. Sáez-Martí, María & Sjögren, Anna, 2005. "Peers and Culture," Working Paper Series 642, Research Institute of Industrial Economics.
  13. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
  14. S Black & Paul Devereux & Kjell Salvanes, 2005. "The More the Merrier? The Effect of Family Size and Birth Order on Childrens Education," CEE Discussion Papers 0050, Centre for the Economics of Education, LSE.
  15. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
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