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What Accounts for the Racial Gap in Time Allocation and Intergenerational Transmission of Human Capital?

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  • George-Levi Gayle
  • Limor Golan
  • Mehmet A. Soytas

Abstract

This paper analyzes the sources of the racial difference in the intergenerational transmission of human capital by developing and estimating a dynastic model of parental time and monetary inputs in early childhood with endogenous fertility, home hours, labor supply, marriage, and divorce. It finds that the racial differences in the marriage matching patterns lead to racial differences in labor supply and home hours of couples. Although both the black-white labor market earnings and marriage market gaps are important sources of the black-white achievement gap, the assortative mating and divorce probabilities racial gaps accounts for a larger fraction of it.

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  • George-Levi Gayle & Limor Golan & Mehmet A. Soytas, 2015. "What Accounts for the Racial Gap in Time Allocation and Intergenerational Transmission of Human Capital?," Working Papers 2015-18, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2015-018
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    More about this item

    Keywords

    Life-cycle dynastic models; Household allocation of resource; Estimation of dynamic game of complete information; Human capital production function; Quantity-quality trade-off.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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