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Economic Interpretations of Intergenerational Correlations

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  • Nathan D. Grawe
  • Casey B. Mulligan

Abstract

Economic theory offers interpretations of intergenerational correlations that are different from the theories of other disciplines, and have important policy implications. Our paper presents a subset of those theories, and shows how they are consistent with observed mobility patterns as they vary across countries, demographic groups, and economic status measure. The data may suggest that the economic approach overemphasizes credit constraints, although more work is needed to further develop some of the alternative economic models. We also show how, in the models, 'progressive' policy may reduce mobility depending on how the policy is administered and how mobility is measured.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8948.

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Date of creation: May 2002
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Publication status: published as Grawe, Nathan D. and Casey B. Mulligan. "Economic Interpretations Of Intergenerational Correlations," Journal of Economic Perspectives, 2002, v16(3,Summer), 45-58.
Handle: RePEc:nbr:nberwo:8948

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