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The intergenerational persistence of human capital: an empirical analysis of four generations

  • Lindahl, Mikael


    (Department of Economics, Uppsala University)

  • Palme, Mårten


    (Department of Economics, Stockholm University)

  • Sandgren Massih, Sofia

    (Department of Economics, Uppsala University)

  • Sjögren, Anna


    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

Most previous studies of intergenerational transmission of human capital are restricted to two generations – parents and their children. In this study we use a Swedish data set which enables us link individual measures of lifetime earnings for three generations and data on educational attainments of four generations. We investigate to what extent estimates based on income data from two generations accurately predicts earnings persistence beyond two generations. We also do a similar analysis for intergenerational persistence in educational attainments. We find two-generation studies to severely under-predict intergenerational persistence in earnings and educational attainment over three generations. Finally, we use our multigenerational data on educational attainment to estimate the structural parameters in the Becker-Tomes model. Our results suggest a small or no causal effect of parental education on children’s educational attainment.

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Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2012:12.

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Length: 30 pages
Date of creation: 08 Jun 2012
Date of revision:
Publication status: Published as Lindahl, Mikael, Mårten Palme, Sofia Sandgren Massih and Anna Sjögren, 'Long-Term Intergenerational Persistence of Human Capital: An Empirical Analysis of Four Generations ' in The Journal of Human Resources, 2015, pages 1-33.
Handle: RePEc:hhs:ifauwp:2012_012
Contact details of provider: Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden
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  1. Lars Lefgren & Matthew J. Lindquist & David Sims, 2012. "Rich Dad, Smart Dad: Decomposing the Intergenerational Transmission of Income," Journal of Political Economy, University of Chicago Press, vol. 120(2), pages 268 - 303.
  2. Aaberge, Rolf & Mogstad, Magne & Peragine, Vito, 2010. "Measuring Long-Term Inequality of Opportunity," IZA Discussion Papers 4714, Institute for the Study of Labor (IZA).
  3. Black, Sandra & Devereux, Paul J., 2010. "Recent Developments in Intergenerational Mobility," CEPR Discussion Papers 7786, C.E.P.R. Discussion Papers.
  4. Bruce Sacerdote, 2004. "What Happens When We Randomly Assign Children to Families?," NBER Working Papers 10894, National Bureau of Economic Research, Inc.
  5. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
  6. Sáez-Martí, María & Sjögren, Anna, 2005. "Peers and Culture," Working Paper Series 642, Research Institute of Industrial Economics.
  7. Helena Holmlund & Mikael Lindahl & Erik Plug, 2011. "The Causal Effect of Parents' Schooling on Children's Schooling: A Comparison of Estimation Methods," Journal of Economic Literature, American Economic Association, vol. 49(3), pages 615-51, September.
  8. Maurin, Eric, 2002. "The impact of parental income on early schooling transitions: A re-examination using data over three generations," Journal of Public Economics, Elsevier, vol. 85(3), pages 301-332, September.
  9. Paul J. Devereux & Sandra E. Black & Kjell G. Salvanes, 2005. "The more the merrier? The effect of family size and birth order on children's education," Open Access publications 10197/310, School of Economics, University College Dublin.
  10. Gary S. Becker & Kevin M. Murphy & Robert F. Tamura, 1990. "Human Capital, Fertility, and Economic Growth," NBER Working Papers 3414, National Bureau of Economic Research, Inc.
  11. Anders Björklund & Mikael Lindahl & Erik Plug, 2006. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," The Quarterly Journal of Economics, MIT Press, vol. 121(3), pages 999-1028, 08.
  12. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
  13. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," Journal of Economic Inequality, Springer, vol. 8(4), pages 429-450, December.
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