Shocking behavior: Random wealth in antebellum Georgia and human capital across generations

Does the lack of wealth constrain parents' investments in the human capital of their descendants? We conduct a nearly 50-year follow-up of an episode in which such constraints would have been plausibly relaxed by a random allocation of substantial wealth to families. We track descendants of participants in Georgia's Cherokee Land Lottery of 1832, in which nearly every adult white male in the state took part. Winners received close to the median level of wealth-a large financial windfall orthogonal to participants' underlying characteristics that might have also affected their children's human capital. Although winners had slightly more children than did nonwinners, they did not send them to school more. Sons of winners have no better adult outcomes (wealth, income, literacy) than the sons of nonwinners, and winners' grandchildren do not have higher literacy or school attendance than nonwinners' grandchildren. We can reject effects implied by the cross-sectional gradient of child outcomes by paternal wealth. This suggests only a limited role for family financial resources in the formation of human capital in the next generations in this environment and a potentially more important role for other factors that persist through family lines.