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The Role of Social Networks and Peer Effects in Education Transmission

  • Sebastian Bervoets


    (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université)

  • Antoni Calvó-Armengol

    (UAB - Universitat Autònoma de Barcelona - Universitat Autónoma de Barcelona)

  • Yves Zenou

    (Université de Stockholm - Université de Stockholm - Université de Stockholm)

We propose a dynastic model in which individuals are born in an educated or uneducated environment that they inherit from their parents. We study the role of social networks on the correlation in the parent-child educational status independent of any parent-child interaction. We show that the network reduces the intergenerational correlation, promotes social mobility and increases the average education level in the population. We also show that a planner that encourages social mobility also reduces social welfare, hence facing a trade off between these two objectives. When individuals choose the optimal level of social mobility, those born in an uneducated environment always want to leave their environment while the reverse occurs for individuals born in an educated environment.

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Paper provided by HAL in its series Working Papers with number halshs-00793169.

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Date of creation: Mar 2012
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Handle: RePEc:hal:wpaper:halshs-00793169
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  1. Benabou, Roland, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 619-52, August.
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  4. Antoni Calvó-Armengol & Thierry Verdier & Yves Zenou, 2015. "Strong and Weak Ties in Employment and Crime," Working Papers 180, Barcelona Graduate School of Economics.
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  12. Bisin, A. & Verdier, T., 1999. "Beyond the Melting Pot: Cultural Transmission, Marriage, and the Evolution of Ethnic and Religious Traits," Papers 1999-10, Laval - Laboratoire Econometrie.
  13. Thomas Piketty, 1994. "Social Mobility and Redistributive Politics," Working papers 94-15, Massachusetts Institute of Technology (MIT), Department of Economics.
  14. Calvó-Armengol, Antoni & Patacchini, Eleonora & Zenou, Yves, 2008. "Peer Effects and Social Networks in Education," IZA Discussion Papers 3859, Institute for the Study of Labor (IZA).
  15. Yannis M. Ioannides, 2012. "From Neighborhoods to Nations: The Economics of Social Interactions," Economics Books, Princeton University Press, edition 1, volume 1, number 9892.
  16. Erik Plug & Wim Vijverberg, 2003. "Schooling, Family Background, and Adoption: Is It Nature or Is It Nurture?," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 611-641, June.
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  19. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
  20. Eleonora Patacchini & Yves Zenou, 2010. "Neighborhood effects and parental involvement in the intergenerational transmission of education," Working Papers 2010/47, Institut d'Economia de Barcelona (IEB).
  21. de Bartolome, Charles A M, 1990. "Equilibrium and Inefficiency in a Community Model with Peer Group Effects," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 110-33, February.
  22. Ladd, Helen F & Ludwig, Jens, 1997. "Federal Housing Assistance, Residential Relocation, and Educational Opportunities: Evidence from Baltimore," American Economic Review, American Economic Association, vol. 87(2), pages 272-77, May.
  23. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2001. "Moving To Opportunity In Boston: Early Results Of A Randomized Mobility Experiment," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 607-654, May.
  24. Ermisch, John & Francesconi, Marco, 2001. "Family Matters: Impacts of Family Background on Educational Attainments," Economica, London School of Economics and Political Science, vol. 68(270), pages 137-56, May.
  25. Pekkarinen, Tuomas & Uusitalo, Roope & Kerr, Sari, 2009. "School tracking and intergenerational income mobility: Evidence from the Finnish comprehensive school reform," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 965-973, August.
  26. Aakvik, Arild & Salvanes, Kjell G. & Vaage, Kjell, 2010. "Measuring heterogeneity in the returns to education using an education reform," European Economic Review, Elsevier, vol. 54(4), pages 483-500, May.
  27. Sanjeev Goyal, 2007. "Introduction to Connections: An Introduction to the Economics of Networks
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    ," Introductory Chapters, Princeton University Press.
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