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Title: Intergenerational Mobility under Education-Effort Complementarity
Author: Alonso Carrera, Jaime
Caballé, Jordi
Raurich, Xavier
Keywords: Generacions
Mobilitat social
Política educativa
Social mobility
Educational policy
Issue Date: 2016
Publisher: Universitat de Barcelona. Facultat d'Economia i Empresa
Series/Report no: [WP E-Eco16/351]
Abstract: In this paper, we build a model that, according to the empirical evidence, gives raise to oscillations in wealth within a dynasty while keeping intergenerational persistence in education attainment. The mechanism that we propose is based on the interaction between effort and wealth suggested by the Carnegie effect, according to which wealthier individuals make less effort than the poorer. The oscillations in wealth arise from changes in the effort exerted by different generations as a response to both inherited wealth and college premium. Our mechanism generates a rich social stratification with several classes in the long run as a consequence of the combination of different levels of education and effort. Furthermore, we generate a large mobility in wealth among classes even in the long run. Our model highlights the role played by the minimum cost on education investment, the borrowing constraints, and the complementarity between effort and education.
It is part of: UB Economics – Working Papers, 2016, E16/351
ISSN: 1136-8365
Appears in Collections:UB Economics – Working Papers [ERE]

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