A Theory of Intergenerational Mobility

Gary S. Becker, Scott Duke Kominers, Kevin M. Murphy, Jorg Ludwig Spenkuch

Research output: Working paper

Abstract

We develop a model of intergenerational resource transmission that emphasizes the link between cross-sectional inequality and intergenerational mobility. By drawing on first principles of human capital theory, we derive several novel results. In particular, we show that, even in a world with perfect capital markets and without differences in innate ability, wealthy parents invest, on average, more in their offspring than poorer ones. As a result, persistence of economic status is higher at the top of the income distribution than in the middle. Successive generations of the same family may even cease to regress towards the mean. Moreover, we demonstrate that government interventions intended to ameliorate inequality may in fact lower intergenerational mobility—even when they do not directly favor the rich. Lastly, we consider how mobility is affected by changes in the marketplace.
Original languageEnglish (US)
Number of pages42
StatePublished - Aug 2015

Fingerprint Dive into the research topics of 'A Theory of Intergenerational Mobility'. Together they form a unique fingerprint.

  • Cite this