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Human Capital and the Rise and Fall of Families

In: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition

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  • Gary S. Becker
  • Nigel Tomes

Abstract

This paper develops a model of the transmission of earnings, assets, and consumption from parents to descendants. The model assumes utility-maximizing parents who are concerned about the welfare of their children. The degree of intergenerational mobility is determined by the interaction of this utility-maximizing behavior with investment and consumption opportunities in different gene rations and with different kinds of luck. The authors examine a number of empirical studies for different countries. Regression to the mean in earnings in rich countries appears to be rapid. Almost all the earnings advantages or disadvantages of ancestors are wiped out in three generations. Copyright 1986 by University of Chicago Press.
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Suggested Citation

  • 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.
  • Handle: RePEc:nbr:nberch:11237
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    References listed on IDEAS

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    19. Kotlikoff, Laurence J & Shoven, John & Spivak, Avia, 1986. "The Effect of Annuity Insurance and Savings and Inequality," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 183-207, July.
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