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Intergenerational Mobility under Private vs. Public Education

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Author Info

  • James B. Davies

    (University of Western Ontario)

  • Jie Zhang

    (University of Queensland)

  • Jinli Zeng

    (National University of Singapore)

Abstract

This paper analyzes intergenerational earnings mobility in a model where human capital is produced using schooling and parental time. In steady -states more mobile societies have less inequality, but in the short-run higher mobility may result from an increase in inequality. Starting from the same inequality, mobility is higher under public than under private education. A rise in income shocks, for example due to increased returns to ability, or a switch from public to private schooling both increase inequality. However, increased shocks raise mobility in the short-run and do not affect it in the long-run, whereas an increased role for private schooling reduces mobility in both the short- and long-run. That these differences may help to identify the source of changes in inequality, and other real-world implications, are illustrated in a brief discussion of time trends and cross-country differences.

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File URL: http://www.fas.nus.edu.sg/ecs/pub/wp/wp0313.pdf
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Bibliographic Info

Paper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0313.

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Length: 24 pages
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:nus:nusewp:wp0313

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Web page: http://www.fas.nus.edu.sg/ecs/index.html
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Related research

Keywords: Mobility; Inequality; Education regimes;

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References

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  1. Fernandez, Raquel & Rogerson, Richard, 1998. "Public Education and Income Distribution: A Dynamic Quantitative Evaluation of Education-Finance Reform," American Economic Review, American Economic Association, vol. 88(4), pages 813-33, September.
  2. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800 Elsevier.
  3. Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, Elsevier, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216 Elsevier.
  4. Jose V. Rodriguez Mora & John Hassler, 2000. "Intelligence, Social Mobility, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 888-908, September.
  5. Roland Benabou & Efe A. Ok, 2001. "Mobility as Progressivity: Ranking Income Processes According to Equality of Opportunity," NBER Working Papers 8431, National Bureau of Economic Research, Inc.
  6. Roland Benabou & Efe A. Ok, 1998. "Social Mobility and the Demand for Redistribution: The POUM Hypothesis," NBER Working Papers 6795, National Bureau of Economic Research, Inc.
  7. Zhang, Jie, 1996. " Optimal Public Investments in Education and Endogenous Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 98(3), pages 387-404.
  8. Goldin, Claudia & Margo, Robert A, 1992. "The Great Compression: The Wage Structure in the United States at Mid-century," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(1), pages 1-34, February.
  9. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, Econometric Society, vol. 49(4), pages 843-67, June.
  10. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
  11. Ann L. Owen & David N. Weil, 1997. "Intergenerational Earnings Mobility, Inequality, and Growth," NBER Working Papers 6070, National Bureau of Economic Research, Inc.
  12. Galor, Oded & Tsiddon, Daniel, 1996. "Technological Progress, Mobility, and Economic Growth," CEPR Discussion Papers 1413, C.E.P.R. Discussion Papers.
  13. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(4), pages 818-34, August.
  14. Saint-Paul, Gilles & Verdier, Thierry, 1992. "Education, Democracy and Growth," CEPR Discussion Papers 613, C.E.P.R. Discussion Papers.
  15. Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, vol. 54(3), pages 339-359, July.
  16. Checchi, Daniele & Ichino, Andrea & Rustichini, Aldo, 1999. "More equal but less mobile?: Education financing and intergenerational mobility in Italy and in the US," Journal of Public Economics, Elsevier, vol. 74(3), pages 351-393, December.
  17. Iyigun, Murat F, 1999. "Public Education and Intergenerational Economic Mobility," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 697-710, August.
  18. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(3), pages 410-42, June.
  19. repec:ese:iserwp:20 is not listed on IDEAS
  20. Peter Gottschalk, 1997. "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 21-40, Spring.
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Citations

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Cited by:
  1. Sandra E. Black & Paul J. Devereux, 2010. "Recent Developments in Intergenerational Mobility," NBER Working Papers 15889, National Bureau of Economic Research, Inc.
  2. Andrea Ichino & Loukas Karabarbounis & Enrico Moretti, 2011. "The Political Economy Of Intergenerational Income Mobility," Economic Inquiry, Western Economic Association International, vol. 49(1), pages 47-69, 01.
  3. Sajid Amin Javed & Mohammad Irfan, 2012. "Intergenerational Mobility: Evidence from Pakistan Panel Household Survey," Poverty and Social Dynamics Paper Series 2012:05, Pakistan Institute of Development Economics.
  4. Ryo Arawatari & Tetsuo Ono, 2009. "Inequality, Mobility and Redistributive Politics," Discussion Papers in Economics and Business 09-12, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  5. C. Fan & Jie Zhang, 2013. "Differential fertility and intergenerational mobility under private versus public education," Journal of Population Economics, Springer, Springer, vol. 26(3), pages 907-941, July.
  6. Michele Bernasconi & Paola Profeta, 2007. "Redistribution or Education? The Political Economy of the Social Race," CESifo Working Paper Series 1934, CESifo Group Munich.
  7. Ryo Arawatari & Tetsuo Ono, 2009. "Inequality, Mobility and Redistributive Taxation in a Finance-constrained Economy," Discussion Papers in Economics and Business 09-28, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  8. Milanovic, Branko, 2008. "Where in the world are you ? Assessing the importance of circumstance and effort in a world of different mean country incomes and (almost) no migration," Policy Research Working Paper Series 4493, The World Bank.

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