IDEAS home Printed from https://ideas.repec.org/p/bri/uobdis/24-783.html

The Intergenerational Elasticity of Earnings: Exploring the Mechanisms

Author

Listed:
  • Uta Bolt
  • Eric French
  • Jamie Hentall-MacCuish
  • Cormac O'Dea

Abstract

How do education, skills, investments of parental time and school quality, and family circumstances during childhood contribute to the persistence of earnings across generations? Building on a classic literature in sociology and a more recent literature in economics, our model allows each of the above variables to affect lifetime earnings directly, as well as through their contribution to human capital formation. The model allows us to decompose the intergenerational elasticity of earnings (IGE) into its drivers. Using data from a representative British cohort followed from birth to age 55, we show the above variables explain most of the IGE. A key driver is the increased levels of parental investments received by children of high income parents early in their lives, and the resulting cognitive development.

Suggested Citation

  • Uta Bolt & Eric French & Jamie Hentall-MacCuish & Cormac O'Dea, 2024. "The Intergenerational Elasticity of Earnings: Exploring the Mechanisms ," Bristol Economics Discussion Papers 24/783, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:24/783
    as

    Download full text from publisher

    File URL: http://www.bristol.ac.uk/efm/media/workingpapers/working_papers/pdffiles/dp23783.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

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


    Cited by:

    1. Loumeau, Gabriel, 2023. "Locating Public Facilities: Theory and Micro Evidence from Paris," Journal of Urban Economics, Elsevier, vol. 135(C).
    2. Koeniger, Winfried & Zanella, Carlo, 2022. "Opportunity and inequality across generations," Journal of Public Economics, Elsevier, vol. 208(C).
    3. Sreevidya Ayyar & Uta Bolt & Eric French & Cormac O'Dea, 2024. "Imagine your life at 25: Gender conformity and later-life outcomes," IFS Working Papers W24/32, Institute for Fiscal Studies.
    4. Uta Bolt & Eric French & Jamie Hentall Maccuish & Cormac O’Dea, 2018. "Intergenerational Altruism and Transfers of Time and Money: A Life-cycle Perspective," Working Papers wp379, University of Michigan, Michigan Retirement Research Center.
    5. Ricky Kanabar, 2024. "Assortative mating and wealth inequality in Great Britain: evidence from the baby boomer and Gen X cohorts," CEPEO Working Paper Series 24-07, UCL Centre for Education Policy and Equalising Opportunities, revised Nov 2024.
    6. Del Bono, Emilia & Etheridge, Ben & Garcia, Paul, 2024. "The economic value of childhood socio-emotional skills," ISER Working Paper Series 2024-01, Institute for Social and Economic Research.
    7. Antonia Antweiler & Joachim Freyberger, 2025. "Flexible estimation of skill formation models," Papers 2507.18995, arXiv.org.

    More about this item

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

    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:bri:uobdis:24/783. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: School of Economics Research Support Team (email available below). General contact details of provider: https://edirc.repec.org/data/sebriuk.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.