On the Intergenerational Transmission of Economic Status
Open accessAbstract
We present a model in which human capital investments occur over the life cycle and across generations, à la Becker and Tomes. The human capital technology features multiple stages of childhood investments, college, and life cycle accumulation. The model can explain a wide range of intergenerational relationships while remaining empirically consistent with cross-sectional inequality. Much of the latter is determined by early investments in children, so that borrowing constraints faced by young parents are important for understanding the persistence of economic status across generations. Education subsidies, especially early on, can significantly reduce the intergenerational persistence of economic status.
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Policies that support earlier parental investments in children's skills are more effective than later interventions such as tuition subsidies.
“For these reasons, and in line with the work of Herrington (2015), Lee and Seshadri (2019), and Daruich (2020) discussed above, policies that support earlier parental investments in children's skills turn out to be more effective than later interventions such as tuition subsidies.”
From Educational Inequality* (2022) · cites this paper as Lee and Seshadri (2019)
The Government Policies section finds that early childhood education subsidies can have the largest long-run effect on mobility, though later subsidies can have a more visible short-run effect. Its policy comparison concerns subsidies at different stages of childhood investment; it does not establish a comparison with tuition subsidies as a later intervention. (LLM, conf=0.86)
Experimental — accuracy not yet measuredThe model of Lee and Seshadri (2019) is consistent with empirically observed intergenerational elasticities in terms of lifetime earnings and college attainment.
“The model is consistent with empirically observed intergenerational elasticities in terms of lifetime earnings and college attainment.”
From Educational Inequality* (2022) · cites this paper as Lee and Seshadri (2019)
Lee and Seshadri find that parental background has a particularly large impact on early investments in young children.
“Similar to Herrington (2015), the authors find that parental background has a particularly large impact on early investments in young children.”
From Educational Inequality* (2022) · cites this paper as Lee and Seshadri (2019)
Policy interventions at early stages, when poorer parents face considerable constraints, are predicted to increase social mobility.
“Policy interventions at this early stage, when poorer parents face considerable constraints, are predicted to increase social mobility.”
From Educational Inequality* (2022) · cites this paper as Lee and Seshadri (2019)
These studies agree that economic inequality and social mobility are closely linked through the determination of investments in the skill acquisition process.
“These studies agree on the basic insight that economic inequality and social mobility are closely linked through the determination of investments in the skill acquisition process, along the lines of our stylized model.”
From Educational Inequality* (2022) · cites this paper as Lee and Seshadri (2019)
These studies point to the importance of the timing of investments in skills and public education funding.
“In addition, they all point to the importance of the timing of investments in skills and public education funding, which we will further discuss in Sections 3.5, 3.6, and 3.8 below.”
From Educational Inequality* (2022) · cites this paper as Lee and Seshadri (2019)
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The Long-Term Distributional and Welfare Effects of Covid-19 School Closures
Fuchs-Schündeln, N., Krueger, D., Ludwig, A., & Popova, I. (2020) · doi:10.3386/w27773 · Cited by 84 · see citing works
Blanden, J., Doepke, M., & Stuhler, J. (2022) · National Bureau of Economic Research · doi:10.3386/w29979 · Cited by 47 · see citing works
Explaining intergenerational mobility: The role of fertility and family transfers
Daruich, D., & Kozlowski, J. (2020) · Review of Economic Dynamics · doi:10.1016/j.red.2019.10.002 · Cited by 39 · see citing works
The Fiscal and Welfare Effects of Policy Responses to the Covid-19 School Closures
Fuchs-Schündeln, N., Krueger, D., Kurmann, A., Lalé, E., Ludwig, A., & Popova, I. (2023) · IMF Economic Review · doi:10.1057/s41308-022-00196-2 · Cited by 33 · see citing works
“(2010), Caucutt and Lochner (2020), Kotera and Seshadri (2017), Lee and Seshadri (2019), Yum (2020), Caucutt et al.”
- Authors
- Lee, S. Y. (., & Seshadri, A.
- Affiliations
- Queen Mary University of London (GB)
- National Bureau of Economic Research (US)
- ORCID
- Lee, Sang Yoon (Tim)
- Venue
- Journal of Political Economy
- Publisher
- University of Chicago Press
- Published
- 2019-04
- Volume
- 127
- Issue
- 2
- Pages
- 855-921
- ISSN
- 0022-3808 (ISSN-L)
- 1537-534X
- PMC
- PMC7644086
- OpenAlex
- W2893365509
- Cited by
- 171
- References
- 2
- Citations by year
- 2026: 15 · 2025: 12 · 2024: 17 · 2023: 15 · 2022: 23 · 2021: 26 · 2020: 23 · 2019: 12 · 2018: 10 · 2017: 7 · 2016: 6 · 2015: 2 · 2014: 3
- FWCI
- 40.38
- Type
- journal article
- Language
- en
- Open access
- green
- www.ncbi.nlm.nih.gov
- Locations
- Journal of Political Economy (publishedVersion)
- PubMed (publishedVersion)
- PubMed Central (acceptedVersion)
- Toulouse 1 Capitole Publications (Université Toulouse I Capitole) (submittedVersion)
- Queen Mary Research Online (Queen Mary University of London) (submittedVersion)
- Funders
- National Institute on Aging (P30AG017266)
- Eunice Kennedy Shriver National Institute of Child Health and Human Development (P2CHD047873)
- Topics
- Social Sciences › Sociology and Political Science › Intergenerational and Educational Inequality Studies
- Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
- Keywords
- intergenerational transmission, human capital, life cycle, university education, credit constraints, educational inequality, education subsidies
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