IDEAS home Printed from https://ideas.repec.org/a/red/issued/18-528.html
   My bibliography  Save this article

Explaining Intergenerational Mobility: The Role of Fertility and Family Transfers

Author

Listed:
  • Diego Daruich

    (University of Southern California)

  • Julian Kozlowski

    (Federal Reserve Bank of St. Louis)

Abstract

Poor families have more children and transfer less resources to them. This suggests that family decisions about fertility and transfers dampen intergenerational mobility. To evaluate the quantitative importance of this mechanism, we extend the standard heterogeneous-agent life cycle model with earnings risk and credit constraints to allow for endogenous fertility, family transfers, and education. The model, estimated to the US in the 2000s, implies that a counterfactual flat income-fertility profile would—through the equalization of initial conditions—increase intergenerational mobility by 6%. The impact of a counterfactual constant transfer per child is twice as large. (Copyright: Elsevier)

Suggested Citation

  • Diego Daruich & Julian Kozlowski, . "Explaining Intergenerational Mobility: The Role of Fertility and Family Transfers," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics.
  • Handle: RePEc:red:issued:18-528
    DOI: 10.1016/j.red.2019.10.002
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1016/j.red.2019.10.002
    Download Restriction: Access to full texts is restricted to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for details.

    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. De Nardi, Mariacristina & Yang, Fang, 2016. "Wealth inequality, family background, and estate taxation," Journal of Monetary Economics, Elsevier, vol. 77(C), pages 130-145.
    2. Raquel Fernández & Nezih Guner & John Knowles, 2005. "Love and Money: A Theoretical and Empirical Analysis of Household Sorting and Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 273-344.
    3. Brant Abbott & Giovanni Gallipoli & Costas Meghir & Giovanni L. Violante, 2013. "Education Policy and Intergenerational Transfers in Equilibrium," Working Paper series 15_13, Rimini Centre for Economic Analysis.
    4. Banerjee, Abhijit & Meng, Xin & Porzio, Tommaso & Qian, Nancy, 2014. "Aggregate Fertility and Household Savings: A General Equilibrium Analysis using Micro Data," CEPR Discussion Papers 9935, C.E.P.R. Discussion Papers.
    5. Daniel Barczyk & Matthias Kredler, 2014. "Altruistically motivated transfers under uncertainty," Quantitative Economics, Econometric Society, vol. 5(3), pages 705-749, November.
    6. Altig, David & Davis, Steven J., 1993. "Borrowing constraints and two-sided altruism with an application to social security," Journal of Economic Dynamics and Control, Elsevier, vol. 17(3), pages 467-494, May.
    7. Giulio Fella, 2014. "A generalized endogenous grid method for non-smooth and non-concave problems," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(2), pages 329-344, April.
    8. Diego Restuccia & Carlos Urrutia, 2004. "Intergenerational Persistence of Earnings: The Role of Early and College Education," American Economic Review, American Economic Association, vol. 94(5), pages 1354-1378, December.
    9. 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.
    10. Judith Niehues & Andreas Peichl, 2014. "Upper bounds of inequality of opportunity: theory and evidence for Germany and the US," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 73-99, June.
    11. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    12. Kremer, Michael & Chen, Daniel L, 2002. "Income Distribution Dynamics with Endogenous Fertility," Journal of Economic Growth, Springer, vol. 7(3), pages 227-258, September.
    13. Gianluca Violante & Giovanni Gallipoli & Costas Meghir, 2005. "Education Decisions, Equilibrium Policies and Wages Dispersion," 2005 Meeting Papers 522, Society for Economic Dynamics.
    14. Yum, Minchul, 2016. "Parental time investment and intergenerational mobility," Working Papers 16-06, University of Mannheim, Department of Economics.
    15. Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2010. "The Macroeconomic Implications of Rising Wage Inequality in the United States," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 681-722, August.
    16. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    17. Cox, Donald & Jimenez, Emmanuel, 1990. "Achieving Social Objectives through Private Transfers: A Review," World Bank Research Observer, World Bank Group, vol. 5(2), pages 205-218, July.
    18. C. Russell Hill & Frank P. Stafford, 1980. "Parental Care of Children: Time Diary Estimates of Quantity, Predictability, and Variety," Journal of Human Resources, University of Wisconsin Press, vol. 15(2), pages 219-239.
    19. James Heckman & Seong Hyeok Moon & Rodrigo Pinto & Peter Savelyev & Adam Yavitz, 2010. "Analyzing social experiments as implemented: A reexamination of the evidence from the HighScope Perry Preschool Program," Quantitative Economics, Econometric Society, vol. 1(1), pages 1-46, July.
    20. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
    21. Mi Luo & Alberto Bisin & Jess Benhabib, 2015. "Wealth Inequality and Social Mobility," 2015 Meeting Papers 364, Society for Economic Dynamics.
    22. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1997. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1121-1166, December.
    23. Morand, Olivier F, 1999. "Endogenous Fertility, Income Distribution, and Growth," Journal of Economic Growth, Springer, vol. 4(3), pages 331-349, September.
    24. Alexander Ludwig & Dirk Krueger, 2015. "Optimal Capital and Progressive Labor Income Taxation with Endogenous Schooling Decisions and Intergenerational Transfers," 2015 Meeting Papers 334, Society for Economic Dynamics.
    25. Ananth Seshadri & Nicolas Roys, 2014. "On the Origin and Causes of Economic Growth," 2014 Meeting Papers 310, Society for Economic Dynamics.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Intergenerational mobility; Inequality; Fertility;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    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:red:issued:18-528. 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: (Christian Zimmermann). General contact details of provider: http://edirc.repec.org/data/sedddea.html .

    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.