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Parental time investment and intergenerational mobility

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  • Yum, Minchul

Abstract

This paper investigates parental time investment in children prior to formal schooling as a source of intergenerational income persistence in the U.S. I develop a dynamic general equilibrium model where lifetime income endogenously persists across generations through multiple channels. My model replicates a series of important untargeted aspects of the data including the U.S. income quintile transition matrix. I find that the parental time investment channel accounts for nearly 40 percent of the observed intergenerational income persistence. Policy experiments suggest that e¤ective ways of improving mobility should focus on narrowing discrepancies in the quantity and quality of parental time investments.

Suggested Citation

  • Yum, Minchul, 2016. "Parental time investment and intergenerational mobility," Working Papers 16-06, University of Mannheim, Department of Economics.
  • Handle: RePEc:mnh:wpaper:40579
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    File URL: https://ub-madoc.bib.uni-mannheim.de/40579/1/Yum%2016-06.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    parental time ; human capital investment ; intergenerational persistence ; college education;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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