Intergenerational Mobility and Intrahousehold Balance of Power: A Theoretical Analysis
The study of intergenerational mobility deals with questions regarding the opportunities of children and how their long run economic outcome is related to their family background. Most importantly, from a policy point of view, it is trying to understand the sources of persistence in economic status across generations. In this paper we study how family’s decisions about investments in human and non-human capital of children are an important determinant of adult’s earnings, and thus of persistence in income differentials. We propose a theoretical model of investment in children that allows parents to have different preferences in the framework of a collective model of household behavior, and investigate how the intra-household distribution of power affects children outcomes and the transmission of economic status across generations. The results altogether suggest that failure to account for intrahousehold balance of power as source of household heterogeneity might affect the interpretation of the structural parameters of interest and the evaluation of both earnings and consumption persistence.
|Date of creation:||Sep 2007|
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