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Shocking Behavior : Random Wealth in Antebellum Georgia and Human Capital Across Generations

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  • Hoyt Bleakley
  • Joseph P. Ferrie

Abstract

Does the lack of wealth constrain parents’ investments in the human capital of their descendants? We conduct a fifty-year followup of an episode in which such constraints would have been plausibly relaxed by a random allocation of wealth to families. We track descendants of those eligible to win in Georgia’s Cherokee Land Lottery of 1832, which had nearly universal participation among adult white males. Winners received close to the median level of wealth – a large financial windfall orthogonal to parents’ underlying characteristics that might have also affected their children’s human capital. Although winners had slightly more children than non-winners, they did not send them to school more. Sons of winners have no better adult outcomes (wealth, income, literacy) than the sons of non-winners, and winners’ grandchildren do not have higher literacy or school attendance than non-winners’ grandchildren. This suggests only a limited role for family financial resources in the transmission of human capital across generations and a potentially more important role for other factors that persist through family lines.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19348.

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Date of creation: Aug 2013
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Handle: RePEc:nbr:nberwo:19348

Note: CH DAE DEV LS
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  1. Bruce Sacerdote, 2002. "Slavery and the Intergenerational Transmission of Human Capital," NBER Working Papers 9227, National Bureau of Economic Research, Inc.
  2. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2003. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," NBER Working Papers 10066, National Bureau of Economic Research, Inc.
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  11. Jason Long & Joseph Ferrie, 2013. "Intergenerational Occupational Mobility in Great Britain and the United States since 1850," American Economic Review, American Economic Association, vol. 103(4), pages 1109-37, June.
  12. Margo, Robert A. & Villaflor, Georgia C., 1987. "The Growth of Wages in Antebellum America: New Evidence," The Journal of Economic History, Cambridge University Press, vol. 47(04), pages 873-895, December.
  13. Hoyt Bleakley & Joseph P. Ferrie, 2013. "Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth," NBER Working Papers 19175, National Bureau of Economic Research, Inc.
  14. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
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