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A centralised and egalitarian school system reduces the cost of education for poor families, and so it should reduce income inequality and make intergenerational mobility easier. In this paper we provide evidence that Italy, compared to the USA, displays less income inequality, as expected given the type of school system, but also less intergenerational upward mobility between occupations and between education levels. We explore some of the reasons which can explain this puzzling result and conclude that in a world in which family background is important for labor market success, a centralised and egalitarian tertiary education does not necessarily help poor children and may take away from them a fundamental tool to prove their talent and to compete with rich children.
The prediction approach proposed by Dearden, Machin and Reed (DMR) consists in (1) regressing the observed incomes of the child and parent families on separate sets of predetermined variables, and (2) regressing the child's predicted income on that of the parents. Conceptually, this estimator must relate to the 2SLS/IV estimator. We re-derive the prediction estimator in matrix form, and reconsider its consistency requirements. The measurement model of DMR is then embedded within a simultaneous equations framework, for which an alternative 2SLS/IV estimator is proposed. The latter produces larger estimates for the intergenerational correlation. The policy relevance of the two sets of findings are then discussed.
The field of biology offers a simple but serious competitor to Gary Becker's theory of the intergenerational transmission of inequality. Many economists have utilized Gary's model to analyze important empirical and policy questions but none have shown that the economic approach dominates Galton's approach from a positive point of view. I derive ten implications of the human capital approach which are distinct from Galton's and provide evidence on nine of them. The evidence includes my own analysis of the PSID, SCF, and NLSY micro data sets as well as references to results reported in previous literatures. Five of the uniquely economic implications appear to be refuted. Three implications are verified - although one is rather trivial - while mixed results are obtained for a ninth implication.
Social scientists and policy analysts have long expressed concern about the extent of intergenerational income mobility in the United States, but remarkably little empirical evidence is available. The few existing estimates of the intergenerational correlation in income have been biased downward by measurement error, unrepresentative samples, or both. New estimates based on intergenerational data from the Panel Study of Income Dynamics imply that the intergenerational correlation in long-run income is at least 0.4, indicating dramatically less mobility than suggested by earlier research. Copyright 1992 by American Economic Association.
This paper provides estimates of the correlation in lifetime earnings between fathers and sons. Intergenerational data from the National Longitudinal Survey are used. Earlier studies, conducted for the United States, report elasticities of children's earnings with respect to parent's earnings of 0.2 or less, suggesting extensive integenerational mobility. These estimates, however, are biased downward by error-contaminated measures of lifetime economic status. Estimates presented in this paper correct for the problem of measurement error and find the intergenerational correlation in income to be on the order of 0.4. This suggests considerably less intergenerational mobility than previously believed.
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