IDEAS home Printed from https://ideas.repec.org/a/eee/eecrev/v54y2010i4p501-516.html
   My bibliography  Save this article

Investments into education--Doing as the parents did

Author

Listed:
  • Kirchsteiger, Georg
  • Sebald, Alexander

Abstract

Empirical evidence suggests that parents with higher levels of education generally attach a higher importance to the education of their children. This implies an intergenerational chain transmitting the attitude towards the formation of human capital from one generation to the next. We incorporate this intergenerational chain into an OLG-model with endogenous human capital formation. In absence of any state intervention such an economy might be characterized by multiple steady states with low or high human capital levels. There are also steady states where the population is permanently divided into different groups with differing human capital and welfare levels. Compulsory schooling is needed to overcome steady states with low human capital and welfare levels. Tax financed education subsidies can lead to further pareto-improvements.

Suggested Citation

  • Kirchsteiger, Georg & Sebald, Alexander, 2010. "Investments into education--Doing as the parents did," European Economic Review, Elsevier, vol. 54(4), pages 501-516, May.
  • Handle: RePEc:eee:eecrev:v:54:y:2010:i:4:p:501-516
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0014-2921(09)00109-3
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Engelmann, Dirk & Fischbacher, Urs, 2009. "Indirect reciprocity and strategic reputation building in an experimental helping game," Games and Economic Behavior, Elsevier, vol. 67(2), pages 399-407, November.
    2. Luc Champarnaud & Victor Ginsburgh & Philippe Michel, 2008. "Can public arts education replace arts subsidization?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 32(2), pages 109-126, June.
    3. Becker, Gary S & Tomes, Nigel, 1976. "Child Endowments and the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 143-162, August.
    4. Galor, Oded & Tsiddon, Daniel, 1997. "Technological Progress, Mobility, and Economic Growth," American Economic Review, American Economic Association, vol. 87(3), pages 363-382, June.
    5. Theodore C. Bergstrom, 1996. "Economics in a Family Way," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1903-1934, December.
    6. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 151-182, July.
    7. 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 (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
    8. Bruce Sacerdote, 2002. "The Nature and Nurture of Economic Outcomes," American Economic Review, American Economic Association, vol. 92(2), pages 344-348, May.
    9. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    10. Galor, Oded & Tsiddon, Daniel, 1997. "The Distribution of Human Capital and Economic Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 93-124, March.
    11. Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, pages 339-359.
    12. Kirchsteiger, Georg & Sebald, Alexander, 2010. "Investments into education--Doing as the parents did," European Economic Review, Elsevier, vol. 54(4), pages 501-516, May.
    13. Hauk, Esther & Saez-Marti, Maria, 2002. "On the Cultural Transmission of Corruption," Journal of Economic Theory, Elsevier, pages 311-335.
    14. Arrondel, Luc & Masson, Andre, 2001. " Family Transfers Involving Three Generations," Scandinavian Journal of Economics, Wiley Blackwell, pages 415-443.
    15. Samuel Bowles & Herbert Gintis, 2002. "The Inheritance of Inequality," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 3-30, Summer.
    16. Theodore C. Bergstrom, 1996. "Economics in a Family Way," Journal of Economic Literature, American Economic Association, pages 1903-1934.
    17. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    18. Hendricks, Lutz, 2007. "The intergenerational persistence of lifetime earnings," European Economic Review, Elsevier, vol. 51(1), pages 125-144, January.
    19. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
    20. Alberto Bisin & Giorgio Topa, 2003. "Empirical Models of Cultural Transmission," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 363-375, 04/05.
    21. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, vol. 67(6), pages 1295-1340, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kirchsteiger, Georg & Sebald, Alexander, 2010. "Investments into education--Doing as the parents did," European Economic Review, Elsevier, vol. 54(4), pages 501-516, May.
    2. repec:zbw:rwirep:0318 is not listed on IDEAS
    3. Kunze, Lars, 2012. "Like Father, Like Son: Inheriting and Bequeathing," Ruhr Economic Papers 318, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Yoko Mimura, 2014. "Family Characteristics and Educational Expenditures in Japan and the United States," Japanese Economy, Taylor & Francis Journals, vol. 40(1), pages 5-28.
    5. Bonein, Aurélie & Serra, Daniel, 2007. "Another experimental look at reciprocal behavior: indirect reciprocity," MPRA Paper 3257, University Library of Munich, Germany, revised Mar 2007.
    6. Elvana Hana & Arsena Gjipali, 2010. "What Determines Upper Secondary School Participation? - Intergenerational Effects Of Education Outcomes In Albania," Journal Articles, Center For Economic Analyses, pages 17-31, June.
    7. Lars Kunze, 2012. "Like Father, Like Son: Inheriting and Bequeathing," Ruhr Economic Papers 0318, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. Gimenez-Nadal, J. Ignacio & Molina, José Alberto & Zhu, Yu, 2014. "Intergenerational Mobility of Housework Time in the United Kingdom," IZA Discussion Papers 8674, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Human capital formation Illiterateness trap Compulsory schooling Education subsidy;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I2 - Health, Education, and Welfare - - Education

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:54:y:2010:i:4:p:501-516. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/eer .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.