Intergenerational persistence of earnings The role of early and college education

• Published in: The American economic review Vol. 94; no. 5; pp. 1354 - 1378
• Main Authors: Restuccia, Diego, Urrutia, Carlos
• Format: Journal Article
• Language: English
• Published: Nashville American Economic Association 01-12-2004
• Subjects: Allgemeinbildung; Bildungsverhalten; Children; Early childhood education; Earnings; Economic models; Economics; Economics education; Education; Education policy; Educational attainment; Einkommensverteilung; Empirical research; Generationenbeziehung; Generations; Higher education; Human capital; Income inequality; Intergenerational relationships; Parental investment; Parents; Public policy; Sozialer Status; Studies; Subsidies; U.S.A; USA; United States > US
• ISSN: 0002-8282; 1944-7981
• DOI: 10.1257/0002828043052213

Recent empirical evidence from the United States indicates a high degree of persistence in earnings across generations. Designing effective public policies to increase social mobility requires identifying and measuring the major sources of persistence and inequality in earnings. We provide a quantitative model of intergenerational human capital transmission that focuses on three sources: innate ability, early education, and college education. We find that approximately one-half of the intergenerational correlation in earnings is accounted for by parental investment in education, in particular early education. We show that these results have important implications for education policy.