Intergenerational Mobility under Private vs. Public Education

James Byron Davies (), Jie Zhang () and Jinli Zeng ()

No 20034, University of Western Ontario, RBC Financial Group Economic Policy Research Institute Working Papers from University of Western Ontario, RBC Financial Group Economic Policy Research Institute

Abstract: This paper analyzes intergenerational earnings mobility in a model where human capital is produced using schooling and parental time. In steady-states more mobile societies have less inequality, but in the short run higher mobility may result from an increase in inequalilty. Starting from the same inequality, mobility is higher under public than under private education. A rise in income shocks, for example due to increased returns to ability, or a switch from public to private schooling both increase inequality. However, increased shocks raise mobility in the short run and do not affect it in the long run, whereas an increased role for private schooling reduces mobility in both the short and long run. That these differences may help to identify the source of changes in inequality, and other real-world implications, are illustrated in a brief discussion of time trends and cross-country differences.

Keywords: mobility; inequality; education regimes (search for similar items in EconPapers)
JEL-codes: J62 D30 I20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu
Date: 2003
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Working Paper: Intergenerational Mobility under Private vs. Public Education (2003)
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