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School Choice and the Intergenerational Poverty Trap

Author

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  • Kazuo Nishimura
  • Lakshmi K. Raut

Abstract

This paper formulates a dynamic altruistic model of parental choice of school quality and intergenerational social mobility. It shows that when there are many school qualities, the earnings of children as a function of parental schooling investment is a non‐concave function, which leads to multiple steady‐state equilibria. The paper studies the intergenerational dynamics of parental schooling investment and gives conditions on the rate of return from parental schooling investment under which some families are stuck in an intergenerational poverty trap. The policy implications are also discussed.

Suggested Citation

  • Kazuo Nishimura & Lakshmi K. Raut, 2007. "School Choice and the Intergenerational Poverty Trap," Review of Development Economics, Wiley Blackwell, vol. 11(2), pages 412-420, May.
    • Handle: RePEc:bla:rdevec:v:11:y:2007:i:2:p:412-420
    DOI: 10.1111/j.1467-9361.2007.00411.x
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    References listed on IDEAS

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    1. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    2. repec:wbk:wbpubs:13890 is not listed on IDEAS
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    Cited by:

    1. Lakshmi Raut, 2018. "Long-term Effects of Preschool on School Performance, Earnings and Social Mobility," Studies in Microeconomics, , vol. 6(1-2), pages 24-49, June.
    2. Wang, Jiyuan & Alessie, Rob & Angelini, Viola, 2025. "Why do parents underinvest in their children’s education? Evidence from China," Economics of Education Review, Elsevier, vol. 107(C).
    3. repec:fgv:epgrbe:v:66:n:2:a:5 is not listed on IDEAS
    4. Heckman, James J. & Raut, Lakshmi K., 2016. "Intergenerational long-term effects of preschool-structural estimates from a discrete dynamic programming model," Journal of Econometrics, Elsevier, vol. 191(1), pages 164-175.
    5. Maldonado, Wilfredo L. & Marques, Isabel M. & Filho, Osvaldo C. da Silva, 2012. "A dynamic model of education level choice: Application to brazilian states," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 66(2), June.

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