A Theory of Intergenerational Mobility

Gary Becker, Scott Kominers, Kevin M. Murphy and Jörg Spenkuch

MPRA Paper from University Library of Munich, Germany

Abstract: We develop a model of intergenerational resource transmission that emphasizes the link between cross-sectional inequality and intergenerational mobility. By drawing on first principles of human capital theory, we derive several novel results. In particular, we show that, even in a world with perfect capital markets and without differences in innate ability, wealthy parents invest, on average, more in their offspring than poorer ones. As a result, persistence of economic status is higher at the top of the income distribution than in the middle. Successive generations of the same family may even cease to regress towards the mean. Moreover, we demonstrate that government interventions intended to ameliorate inequality may in fact lower intergenerational mobility—even when they do not directly favor the rich. Lastly, we consider how mobility is affected by changes in the marketplace.

Keywords: intergenerational mobility; human capital; inequality (search for similar items in EconPapers)
JEL-codes: D1 D10 D31 J0 (search for similar items in EconPapers)
Date: 2015-08
New Economics Papers: this item is included in nep-gro, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Journal Article: A Theory of Intergenerational Mobility (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:66334

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