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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
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  1. Becker, Gary S & Murphy, Kevin M & Tamura, Robert, 1990. "Human Capital, Fertility, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S12-37, October.
  2. Helena Holmlund & Mikael Lindahl & Erik Plug, 2010. "The Causal Effect of Parents' Schooling on Children's Schooling - A Comparison of Estimation Methods," CESifo Working Paper Series 3234, CESifo Group Munich.
  3. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005. "The More the Merrier? The Effect of Family Size and Birth Order on Children's Education," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 669-700, May.
  4. Eric Maurin, 1999. "The Impact of Parental Income on Early Schooling Transitions : A Re-examination Using Data over Three Generations," Working Papers 99-69, Centre de Recherche en Economie et Statistique.
  5. 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.
  6. Sandra E. Black & Paul J. Devereux, 2010. "Recent Developments in Intergenerational Mobility," Working Papers 201025, Geary Institute, University College Dublin.
  7. 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.
  8. 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.
  9. Rolf Aaberge & Magne Mogstad & Vito Peragine, 2010. "Measuring long-term inequality of opportunity," Discussion Papers 620, Research Department of Statistics Norway.
  10. María Sáez-Martí & Anna Sjögren, 2008. "Peers and Culture," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 73-92, 03.
  11. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  12. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," Journal of Economic Inequality, Springer, vol. 8(4), pages 429-450, December.
  13. Bruce Sacerdote, 2004. "What Happens When We Randomly Assign Children to Families?," NBER Working Papers 10894, National Bureau of Economic Research, Inc.
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