IDEAS home Printed from https://ideas.repec.org/p/ivi/wpasad/2006-20.html
   My bibliography  Save this paper

Education And Family Income: Can Poor Children Signal Their Talent?

Author

Listed:
  • Gonzalo Olcina Vauteren

    (Universitat de València)

  • Luisa Escriche

    (Universitat de València)

Abstract

The aim of this paper is to explain how financial constraints and family background characteristics affect the signalling educational investments of individuals born in low-income families. We show that talented students who are poor are unable to signal their talent, as the maximum level of education they can attain may also be achieved by less talented students who are rich. Under this approach, a de-crease in inequalities across generations cannot be expected. The paper also shows that an increase in educational standards would help poor individuals with high-ability if it is combined with other non-monetary measures.

Suggested Citation

  • Gonzalo Olcina Vauteren & Luisa Escriche, 2006. "Education And Family Income: Can Poor Children Signal Their Talent?," Working Papers. Serie AD 2006-20, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2006-20
    as

    Download full text from publisher

    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2006-20.pdf
    File Function: Fisrt version / Primera version, 2006
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gaviria, Alejandro, 2002. "Intergenerational mobility, sibling inequality and borrowing constraints," Economics of Education Review, Elsevier, vol. 21(4), pages 331-340, August.
    2. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800, Elsevier.
    3. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    4. 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.
    5. Green, Jerry & Laffont, Jean-Jacques, 1990. "Competition on many fronts: A stackelberg signaling equilibrium," Games and Economic Behavior, Elsevier, vol. 2(3), pages 247-272, September.
    6. Joseph G. Altonji & Thomas A. Dunn, 1991. "Relationships Among the Family Incomes and Labor Market Outcomes of Relatives," NBER Working Papers 3724, National Bureau of Economic Research, Inc.
    7. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-867, June.
    8. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    9. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, April.
    10. Shea, John, 2000. "Does parents' money matter?," Journal of Public Economics, Elsevier, vol. 77(2), pages 155-184, August.
    11. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 179-221.
    12. John G. Riley, 2001. "Silver Signals: Twenty-Five Years of Screening and Signaling," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 432-478, June.
    13. Banks, Jeffrey S., 1990. "A model of electoral competition with incomplete information," Journal of Economic Theory, Elsevier, vol. 50(2), pages 309-325, April.
    14. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-877, October.
    15. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541, Elsevier.
    16. Janet Currie & Duncan Thomas, 1995. "Race, Children's Cognitive Achievement and The Bell Curve," NBER Working Papers 5240, National Bureau of Economic Research, Inc.
    17. Mailath George J. & Okuno-Fujiwara Masahiro & Postlewaite Andrew, 1993. "Belief-Based Refinements in Signalling Games," Journal of Economic Theory, Elsevier, vol. 60(2), pages 241-276, August.
    18. Stiglitz, Joseph E, 1975. "The Theory of "Screening," Education, and the Distribution of Income," American Economic Review, American Economic Association, vol. 65(3), pages 283-300, June.
    19. Fernando Galindo-Rueda & Anna Vignoles, 2005. "The Declining Relative Importance of Ability in Predicting Educational Attainment," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    20. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
    21. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-1189, December.
    22. Sanders Korenman & Christopher Winship, 1995. "A Reanalysis of The Bell Curve," NBER Working Papers 5230, National Bureau of Economic Research, Inc.
    23. Arnaud Chevalier & Gauthier Lanot, 2002. "The Relative Effect of Family Characteristics and Financial Situation on Educational Achievement," Education Economics, Taylor & Francis Journals, vol. 10(2), pages 165-181.
    24. Heckman, James J, 1995. "Lessons from the Bell Curve," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1091-1120, October.
    25. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-429, June.
    26. Massimo Giannini, 1997. "Education and Job Market Signalling: A Comment," Game Theory and Information 9704002, University Library of Munich, Germany.
    27. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    28. Stephen Cameron & Christopher Taber, 2000. "Borrowing Constraints and the Returns to Schooling," NBER Working Papers 7761, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Stefano STAFFOLANI & Maria Cristina RECCHIONI, 2016. "Increasing Graduation and Calling for More Autonomy in Higher Education: Is It a Good Thing? A Theoretical Model," Working Papers 419, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hellier, Joël, 2017. "Stratified higher education,social mobility at the top and efficiency: The case of the French ‘Grandes écoles’," MPRA Paper 76724, University Library of Munich, Germany.
    2. Kerwin Kofi Charles & Erik Hurst, 2003. "The Correlation of Wealth across Generations," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1155-1182, December.
    3. Arnaud Lefranc & Alain Trannoy, 2005. "Intergenerational earnings mobility in France: Is France more mobile than the U.S.?," Annals of Economics and Statistics, GENES, issue 78, pages 57-77.
    4. Corak, Miles & Piraino, Patrizio, 2010. "Intergenerational Earnings Mobility and the Inheritance of Employers," IZA Discussion Papers 4876, Institute of Labor Economics (IZA).
    5. Robert Lucas & Sari Kerr, 2013. "Intergenerational income immobility in Finland: contrasting roles for parental earnings and family income," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1057-1094, July.
    6. Nathan D. Grawe & Casey B. Mulligan, 2002. "Economic Interpretations of Intergenerational Correlations," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 45-58, Summer.
    7. Tang, Le & Sun, Shiyu & Yang, Weiguo, 2021. "Does government education expenditure boost intergenerational mobility? Evidence from China," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 13-22.
    8. John Ermisch & Marco Francesconi & Thomas Siedler, 2004. "Intergenerational Economic Mobility and Assortative Mating," Discussion Papers of DIW Berlin 448, DIW Berlin, German Institute for Economic Research.
    9. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Cheti Nicoletti & Marco Francesconi, 2006. "Intergenerational mobility and sample selection in short panels," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(8), pages 1265-1293.
    11. Rauh, Christopher, 2017. "Voting, education, and the Great Gatsby Curve," Journal of Public Economics, Elsevier, vol. 146(C), pages 1-14.
    12. Miles Corak, 2006. "Do Poor Children Become Poor Adults? Lessons from a Cross-Country Comparison of Generational Earnings Mobility," Research on Economic Inequality, in: Dynamics of Inequality and Poverty, pages 143-188, Emerald Group Publishing Limited.
    13. Ermisch, John & Francesconi, Marco, 2002. "Intergenerational Social Mobility and Assortative Mating in Britain," IZA Discussion Papers 465, Institute of Labor Economics (IZA).
    14. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    15. Jørgen Modalsli & Kelly Vosters, 2024. "Spillover Bias in Multigenerational Income Regressions," Journal of Human Resources, University of Wisconsin Press, vol. 59(3), pages 743-776.
    16. Guido Neidhöfer, 2019. "Intergenerational mobility and the rise and fall of inequality: Lessons from Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(4), pages 499-520, December.
    17. Gokhale, Jagadeesh & Kotlikoff, Laurence J. & Sefton, James & Weale, Martin, 2001. "Simulating the transmission of wealth inequality via bequests," Journal of Public Economics, Elsevier, vol. 79(1), pages 93-128, January.
    18. Huang, Xiao & Huang, Shoujun & Shui, Ailun, 2021. "Government spending and intergenerational income mobility: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 387-414.
    19. Sweetman, A. & van Ours, J.C., 2014. "Immigration : What About the Children and Grandchildren?," Discussion Paper 2014-009, Tilburg University, Center for Economic Research.
    20. Silke Anger & Daniel D. Schnitzlein, 2017. "Cognitive skills, non-cognitive skills, and family background: evidence from sibling correlations," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(2), pages 591-620, April.

    More about this item

    Keywords

    Market selection hypothesis; General Equilibrium with Incomplete markets; Wealth accumulation;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ivi:wpasad:2006-20. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Departamento de Edición (email available below). General contact details of provider: https://edirc.repec.org/data/ievages.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.