Intergenerational Persistence of Earnings: The Role of Early and College Education
Diego Restuccia, Carlos Urrutia
American Economic Review · 2004 · Volume 94 · Issue 5
Abstract
Recent empirical evidence from the United States indicates a high degree of persistence in earnings across generations. Designing effective public policies to increase social mobility requires identifying and measuring the major sources of persistence and inequality in earnings. We provide a quantitative model of intergenerational human capital transmission that focuses on three sources: innate ability, early education, and college education. We find that approximately one-half of the intergenerational correlation in earnings is accounted for by parental investment in education, in particular early education. We show that these results have important implications for education policy.
Keywords
Analysis of Education, Human Capital, Skills, Occupational Choice, Labor Productivity, Job, Occupational, and Intergenerational Mobility, Promotion
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