Dynastic human capital, inequality and intergenerational mobility

 

By:	Adermon, Adrian (IFAU – Institute for Evaluation of Labour Market and Education Policy) ; Lindahl, Mikael (Department of Economics, University of Gothenburg; IFAU; IZA; UCLS; CESifo) ; Palme, Mårten (Department of economics, Stockholm University; IZA)
We study the importance of the extended family – or the dynasty – for the persistence in human capital inequality across generations. We use data including the entire Swedish population, linking four generations. This data structure enables us to – in addition to parents, grandparents and great grandparents – identify parents’ siblings and cousins, as well as their spouses, and the spouses’ siblings. We introduce and estimate a new parameter, which we call the intergenerational transmission of dynastic inequality. This parameter measures the between-dynasty variation in intergenerational transmission of human capital. We use three different measures of human capital: years of schooling, family income and an index of occupational status. Our results show that traditional parent-child estimates miss about half of the persistence across generations estimated by the extended model.
Keywords:	intergenerational mobility; extended family; dynasty; human capital
JEL:	I24 J62
URL:	http://d.repec.org/n?u=RePEc:hhs:ifauwp:2016_019&r=ltv