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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)

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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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Publisher 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
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Handle: RePEc:nus:nusewp:wp0313

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Related research
Keywords: Mobility Inequality Education regimes

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Find related papers by JEL classification:
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
D30 - Microeconomics - - Distribution - - - General
I20 - Health, Education, and Welfare - - Education - - - General

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  1. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March. [Downloadable!] (restricted)
  2. 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. [Downloadable!] (restricted)
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  3. John Hassler & Jose V. Rodriguez Mora, 2000. "Intelligence, Social Mobility, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 888-908, September. [Downloadable!] (restricted)
  4. Owen, Ann L. & Weil, David N., 1998. "Intergenerational earnings mobility, inequality and growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 71-104, February. [Downloadable!] (restricted)
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  5. 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. [Downloadable!] (restricted)
  6. Roland Bénabou & Efe A. Ok, 2001. "Social Mobility And The Demand For Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 447-487, May. [Downloadable!] (restricted)
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  7. 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, vol. 107(1), pages 1-34, February. [Downloadable!] (restricted)
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  8. 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, vol. 100(4), pages 813-34, August.
  9. Zhang, Jie, 1996. " Optimal Public Investments in Education and Endogenous Growth," Scandinavian Journal of Economics, Blackwell Publishing, vol. 98(3), pages 387-404.
  10. Galor, Oded & Tsiddon, Daniel, 1997. "Technological Progress, Mobility, and Economic Growth," American Economic Review, American Economic Association, vol. 87(3), pages 363-82, June. [Downloadable!] (restricted)
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  11. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June. [Downloadable!] (restricted)
  12. Zvi Eckstein & Itzhak Zilcha, 1991. "The Effects of Compulsory Schooling on Growth, Income Distribution and Welfare," Boston University - Institute for Economic Development 20, Boston University, Institute for Economic Development.
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  13. Saint-Paul, Gilles & Verdier, Thierry, 1993. "Education, democracy and growth," Journal of Development Economics, Elsevier, vol. 42(2), pages 399-407, December. [Downloadable!] (restricted)
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  14. 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.
  15. 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, vol. 101(3), pages 410-42, June. [Downloadable!] (restricted)
  16. Gottschalk, Peter, 1997. "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 21-40, Spring. [Downloadable!] (restricted)
  17. 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. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Michele Bernasconi & Paola Profeta, 2007. "Redistribution or Education? The Political Economy of the Social Race," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  2. Irene Ng, 2007. "Intergenerational Income Mobility in Singapore," Topics in Economic Analysis & Policy, Berkeley Electronic Press, vol. 7(2), pages 1713-1713. [Downloadable!] (restricted)
  3. Milanovic, Branko, 2007. "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," MPRA Paper 3420, University Library of Munich, Germany. [Downloadable!]
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