parental time , human capital investment , intergenerational persistence , college education
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.
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