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Intergenerational Transmission of Family Influence

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  • Sadegh Eshaghnia
  • James J. Heckman
  • Rasmus Landersø
  • Rafeh Qureshi

Abstract

This paper studies intergenerational mobility—the transmission of family influence. We develop and estimate measures of lifetime resources (income and wealth) motivated by economic theory that account for generational differences in life-cycle trajectories, uncertainty, and credit constraints. These measures of lifetime resources allow us to estimate the transmission of welfare and lifetime resources at different stages of the life cycle. We compare these measures with traditional ones such as wage income and disposable income measured over narrow windows of age that are used to proxy lifetime wealth. The performance of proxy measures is poor. Parents’ expected lifetime resources are stronger predictors of many important child outcomes (including children’s own expected lifetime resources and education) than the income measures traditionally used in the literature on social mobility. Changes in patterns of educational attainment across generations explain most of the intergenerational change in life-cycle dynamics. While relative mobility is overstated by the traditional income measures, absolute upward mobility is understated. Recent generations have higher welfare and are better off compared to their parents.

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  • Sadegh Eshaghnia & James J. Heckman & Rasmus Landersø & Rafeh Qureshi, 2022. "Intergenerational Transmission of Family Influence," NBER Working Papers 30412, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30412
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    2. Eshaghnia, Sadegh S. M. & Heckman, James J. & Razavi, Goya, 2023. "Pricing Neighborhoods," IZA Discussion Papers 16234, Institute of Labor Economics (IZA).
    3. Damian Clarke & Nicolas Lillo Bustos & Kathya Tapia-Schythe, 2022. "Estimating Inter-generational Returns to Medical Care: New Evidence from At-Risk Newborns," Working Papers wp537, University of Chile, Department of Economics.
    4. Dasgupta, Kabir & Diegmann, André & Kirchmaier, Tom & Plum, Alexander, 2022. "The gender reveal: The effect of sons on young fathers’ criminal behavior and labor market activities," Labour Economics, Elsevier, vol. 78(C).
    5. Morris, Heather & Blewitt, Claire & Savaglio, Melissa & Halfpenny, Nick & Carolan, Erin & Miller, Robyn & Skouteris, Helen, 2022. "Using a realist lens to understand the Victorian Family Preservation and Reunification Response in the first year of implementation — Towards a better understanding of practice," Children and Youth Services Review, Elsevier, vol. 143(C).
    6. Sadegh Eshaghnia & James J. Heckman & Rasmus Landersø & Rafeh Qureshi, 2022. "Intergenerational Transmission of Family Influence," NBER Working Papers 30412, National Bureau of Economic Research, Inc.
    7. Sadegh Eshaghnia & James J. Heckman & Rasmus Landersø, 2023. "The Impact of the Level and Timing of Parental Resources on Child Development and Intergenerational Mobility," NBER Working Papers 31093, National Bureau of Economic Research, Inc.
    8. Adamecz, Anna & Lovász, Anna & Vujic, Suncica, 2024. "Beyond the Degree: Fertility Outcomes of 'First in Family' Graduates," IZA Discussion Papers 17216, Institute of Labor Economics (IZA).
    9. Eshaghnia, Sadegh S. M. & Heckman, James J. & Landersø, Rasmus, 2023. "Maximum Impact Intergenerational Associations," IZA Discussion Papers 16038, Institute of Labor Economics (IZA).

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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