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The Intergenerational Persistence of Human Capital: An Empirical Analysis of Four Generations

  • Lindahl, Mikael

    ()

    (Uppsala University)

  • Palme, Mårten

    ()

    (Stockholm University)

  • Sandgren Massih, Sofia

    ()

    (Uppsala University)

  • Sjögren, Anna

    ()

    (IFAU)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6463.

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Length: 34 pages
Date of creation: Apr 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6463
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  1. 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.
  2. 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.
  3. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, Elsevier.
  4. Rolf Aaberge & Magne Mogstad & Vito Peragine, 2010. "Measuring long-term inequality of opportunity," Discussion Papers 620, Research Department of Statistics Norway.
  5. Bruce Sacerdote, 2004. "What Happens When We Randomly Assign Children to Families?," NBER Working Papers 10894, National Bureau of Economic Research, Inc.
  6. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
  7. Gary S. Becker & Kevin M. Murphy & Robert Tamura, . "Human Capital, Fertility, and Economic Growth," University of Chicago - Population Research Center 90-5a, Chicago - Population Research Center.
  8. María Sáez-Martí & Anna Sjögren, 2008. "Peers and Culture," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 73-92, 03.
  9. 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.
  10. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," Journal of Economic Inequality, Springer, vol. 8(4), pages 429-450, December.
  11. 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.
  12. 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.
  13. 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.
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