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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 (3rd Edition)

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Listed author(s):
  • Gary S. Becker
  • Nigel Tomes
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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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This chapter was published in:
  • Gary S. Becker, 1994. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition)," NBER Books, National Bureau of Economic Research, Inc, number beck94-1.
    • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 11237.
    Handle: RePEc:nbr:nberch:11237
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    1. 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.
    2. Lillard, Lee A & Willis, Robert J, 1978. "Dynamic Aspects of Earning Mobility," Econometrica, Econometric Society, vol. 46(5), pages 985-1012, September.
    3. Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-397, July.
    4. Ehrlich, Isaac & Ben-Zion, Uri, 1976. "Asset Management, Allocation of Time, and Returns to Saving," Economic Inquiry, Western Economic Association International, vol. 14(4), pages 558-586, December.
    5. Luigi L. Pasinetti, 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth," Review of Economic Studies, Oxford University Press, vol. 29(4), pages 267-279.
    6. Benoit Mandelbrot, 1962. "Paretian Distributions and Income Maximization," The Quarterly Journal of Economics, Oxford University Press, vol. 76(1), pages 57-85.
    7. Tomes, Nigel, 1981. "The Family, Inheritance, and the Intergenerational Transmission of Inequality," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 928-958, October.
    8. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-867, June.
    9. Judith Blake, 1981. "Family size and the quality of children," Demography, Springer;Population Association of America (PAA), vol. 18(4), pages 421-442, November.
    10. Behrman, Jere R & Taubman, Paul, 1976. "Intergenerational Transmission of Income and Wealth," American Economic Review, American Economic Association, vol. 66(2), pages 436-440, May.
    11. Conlisk, John, 1974. "Can Equalization of Opportunity Reduce Social Mobility?," American Economic Review, American Economic Association, vol. 64(1), pages 80-90, March.
    12. Smith, James P, 1984. "Race and Human Capital," American Economic Review, American Economic Association, vol. 74(4), pages 685-698, September.
    13. Tinbergen, Jan, 1970. "A Positive and a Normative Theory of Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 16(3), pages 221-234, September.
    14. Bevan, D L, 1979. "Inheritance and the Distribution of Wealth," Economica, London School of Economics and Political Science, vol. 46(184), pages 381-402, November.
    15. de Wolff, P. & van Slijpe, A. R. D., 1973. "The relation between income, intelligence, education and social background," European Economic Review, Elsevier, vol. 4(3), pages 235-264, October.
    16. Drazen, Allan, 1978. "Government Debt, Human Capital, and Bequests in a Life-Cycle Model," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 505-516, June.
    17. 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.
    18. Menchik, Paul L, 1979. "Inter-generational Transmission of Inequality: An Empirical Study of Wealth Mobility," Economica, London School of Economics and Political Science, vol. 46(184), pages 349-362, November.
    19. Pryor, Frederic L, 1973. "Simulation of the Impact of Social and Economic Institutions on the Size Distribution of Income and Wealth," American Economic Review, American Economic Association, vol. 63(1), pages 50-72, March.
    20. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 1-25.
    21. Bowles, Samuel, 1972. "Schooling and Inequality from Generation to Generation," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 219-251, Part II, .
    22. Peltzman, Sam, 1973. "The Effect of Government Subsidies-in-Kind on Private Expenditures: The Case of Higher Education," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 1-27, Jan.-Feb..
    23. William T. Bielby & Robert M. Hauser, 1977. "Response Error in Earnings Functions for Nonblack Males," Sociological Methods & Research, , vol. 6(2), pages 241-280, November.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Intergenerational Mobility, Guilds and Income in the Very Long Run
      by Guy Rolnik in Pro-Market on 2016-06-04 21:14:13
    2. What makes good parents?
      by fazeer in an economist in paradise on 2009-08-19 16:27:37
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