Social Security Disability Insurance and intergenerational economic mobility

Economic opportunity in the United States is shaped by parental health and disability. We hypothesize that Disability Insurance (DI) may mitigate the observed pattern. Using linked survey and administrative data, we find children of work-limited parents have 4.1 percentiles less upward economic mobility and 4.3 percentiles more downward mobility relative to children of non-limited parents. Despite poorer health, children of parents initially awarded DI experience a negligible mobility gap relative to peers whose parents never apply to DI and 3.6 percentiles more upward mobility than peers of parents who are initially denied benefits—suggesting DI may moderate economic mobility.     

Catching up? The educational mobility of migrants’ and natives’ children in Europe

Migrants into European countries are often less educated than European natives. We analyse whether migrants’ children are more or less likely than natives’ children to achieve upward educational mobility across generations, and study differences in the factors, which contribute to differences in mobility for the two groups. We find that migrants’ descendants are more often upwardly mobile (and less often downwardly mobile) than their native peers in the majority of countries studied, and show that the main factor contributing to these patterns is the education level of parents. Although a lower parental education means that their children are less likely to access the same amount of human, social and financial capital as children of more highly educated parents, migrants’ descendants over the last two generations were able to make significant progress in reducing education gaps with natives.     

TRANSFERS FROM MIGRANTS TO THEIR CHILDREN: EVIDENCE THAT ALTRUISM AND CULTURAL FACTORS MATTER

This paper focuses on the determinants of financial inter vivos transfers by migrants living in France in 2003 to their adult children. From a theoretical viewpoint, such transfers may be explained either by altruism or by exchange. While parents would direct their assistance to their less well off children under altruism, support should be channeled to children who live nearby their parents under the exchange motive. We assess the relevance of these two motives using the French PRI survey. Unequal sharing is frequently observed and children are more likely to receive financial transfers when they are in poor circumstance, but not necessarily when living in proximity to parents. We also emphasize the role of cultural factors as determinants of the parental allocation among children. Muslim parents, in particular, are more likely to make transfers to sons than to daughters.     

Balancing the risk of ‘Lazearian’ interrupters and the benefits of educational and social peers: tracing parental preferences for class-size reduction

Using Danish survey data from a choice experiment, parental preferences for class-size reduction are estimated. While parents with children in large classes are willing to pay for class-size reduction, parents with children in small classes are reluctant and even express negative utility for further class-size reduction. We interpret this as parents balancing the risk of ‘Lazearian’ interrupters and the benefits of educational and social peers when forming their preferences for class size.     

Horizontal vs. vertical transmission of fertility preferences

I study the cultural transmission of fertility preferences among second-generation immigrant women observed in U.S. Censuses from 1910 to 1970. As hypothesized by Bisin and Verdier (2001), the transmission of preferences can be “vertical” or “horizontal”. Using a unique source documenting the variation in fertility behavior in Europe before and after the first demographic transition (1830–1970), I unpack the influence of parents (measured by source-country fertility at the time of departure from Europe) versus the influence of peers from the same source-country (measured by fertility of the same-age cohorts living in the source-country and transmitted by same-age recent immigrants). I find that the transmission mechanism is crucially affected by the number of foreign-born immigrant peers living in the same MSA. On one hand, the “vertical” channel of transmission is stronger in places where there are few newly arrived foreign-born immigrant couples from the same source-countries. On the other hand, the “horizontal” channel prevails in MSA’s densely populated by recently arrived immigrants from the same source-countries of second-generation ones.     

On the Cultural Transmission of Corruption

We provide a cultural explanation to the phenomenon of corruption in the framework of an overlapping generations model with intergenerational transmission of values. We show that the economy has two steady states with different levels of corruption. The driving force in the equilibrium selection process is the education effort exerted by parents which depends on the distribution of ethics in the population and on expectations about future policies. We propose some policy interventions which via parents' efforts have long-lasting effects on corruption and show the success of intensive education campaigns. Educating the young is a key element in reducing corruption successfully. Journal of Economic Literature Classification Numbers: D10, J13.     

Signaling about Norms: Socialization under Strategic Uncertainty

We consider a signaling model in which adults possess information about the dominant social norm. Children want to conform to whatever norm is dominant but, lacking accurate information, take the observed behavior of their parents as representative. We show that this causes a signaling distortion in adult behavior, even in the absence of conflicts of interest. Parents adopt attitudes that encourage their children to behave in a socially safe way (i.e., the way that would be optimal under maximum uncertainty about the prevailing social norm). We discuss applications to sexual attitudes, collective reputation, and trust.     

Relative Affluence and Child Labor—Explaining a Paradox

Some micro level empirical studies found child labor incidence increasing even with improvement in the economic conditions of the poor. This paper provides a possible explanation as to why increase in absolute income may not be sufficient to solve the problem of child labor. We argue that people in general are not just concerned about their own consumption; they are very much affected by the consumption of their peers. While taking decisions regarding the time allocation of their children between work and leisure, parents do keep an eye on their relative position in the society. We develop a theoretical model of household decision making to show that child labor supply from a poor family can increase even with improvements in its economic conditions, if the family's relative position in the society deteriorates and if the relative status effect is sufficiently strong.     

Cooperation and cultural transmission in a coordination game

The aim of this paper is to analyze if cooperation can be the product of cultural evolution in a two-stage coordination game, consisting of a production stage followed by a negotiation phase. We present an overlapping generations model with cultural transmission of preferences where the distribution of preferences in the population and the strategies are determined endogenously and simultaneously. There are several groups in the society; some of them play cooperatively and others do not. Socialization takes place inside the group, but there is a positive rate of migration among groups which parents anticipate. Our main result shows that all groups converge to the cooperative equilibrium.     

Class or caste? A study on the role of caste and wealth status in school choice decision

There is a strong political opinion in India in favour of replacing caste based affirmative action with an economic class based one. We contribute to this debate by looking at the interaction of caste and wealth in school choice. We show that too rich and too poor parents behave in the same way irrespective of their caste identities—rich parents sending their children to private schools while poor parents choosing public schools for their children. The caste identity, we find, plays a role for the school choice decision made by the parents belonging to the economic middle class. Among the economic middle class parents, the ones from the privileged castes send their children to private schools, while the children of the parents from the disadvantaged castes are sent to public schools. The result is robust to alternative definitions of privileged and disadvantaged castes. For school quality choice, however, we find a monotonic relationship between wealth and school quality.     

Why do parents socialize their children to behave pro-socially? An information-based theory

We present a model of intergenerational transmission of pro-social values in which parents have information about relevant characteristics of society that is not directly available to their children. Differently from existing models of cultural transmission of values (such as Bisin and Verdier, 2001, Tabellini, 2008) we assume that parents are exclusively concerned with their children's material welfare. If parents coordinate their educational choices, a child would look at her system of values to predict the values of her contemporaries, with whom she may interact. A parent may thus choose to instill pro-social values into his child in order to signal to her that others can generally be trusted. This implies that parents may optimally decide to endow their children with values that stand in contrast with maximization of material welfare, even if their children's material welfare is all they care about.     

Value Diversity and Regional Economic Development

We investigate the link between culture and regional economic development within European countries. Considering a variety of cultural values, we provide evidence that it is the degree of diversity in these values at the regional level that strongly correlates with economic performance, rather than the prevalence of specific values. In particular, we show that greater value diversity is negatively associated with regional economic performance within countries, which also relates to lower institutional quality and poorer public goods provision. These patterns are robust even when diversity is measured on the basis of values expressed by emigrants residing outside their region of origin.     

Intergenerational Educational Mobility in Hong Kong: Are Immigrants More Mobile than Natives?

We characterize intergenerational educational mobility by the percentage of children who have more schooling than their parents, and the change in the relative probability of the children attending university across their parents’ schooling levels. In Hong Kong, immigrant children are very upward mobile; their percentage of upward mobility has caught up with that of the children of the Hong Kong‐born parents. Hong Kong‐born children of immigrant parents are also more mobile than the children of Hong Kong born parents. Even though parental educational background remains important for university attendance, immigrant children experience higher mobility than Hong Kong‐born children in terms of access to university education.     

Social mobility and inequality in urban China: understanding the role of intergenerational transmission of education

China’s rapid economic growth since the late 1980s has been accompanied by great economic and social transformations, which have resulted in a sharp increase in income inequality. This article contributes to the literature of social mobility in China by examining the impact of parental education on the education of their children. Using the 1990 and 2000 Chinese Population Censuses, we employ nonparametric estimation strategies to provide a systematic investigation of intergenerational transmission of education in urban China. We find evidence of increasing parents–children educational correlations. Our results raise concerns regarding economic inequality in urban China as high intergenerational persistence of education is expected to be a barrier to equal opportunities in children’s education attainments and their future labour market outcomes.     

Does cultural diversity increase the rate of entrepreneurship?

In the economic development literature, cultural diversity (for example, ethnolinguistic fractionalization) has been shown to have a negative impact on economic outcomes in many underdeveloped countries. We hypothesize that the impact of diversity on economic performance depends on the quality of a country's institutions. Under bad institutions diversity leads to conflict and expropriation, while under good institutions diversity leads to economic progress. A culturally diverse society or interaction among different cultures encourages exchange of, and competition between ideas and different world views. Under good institutions, this amalgamation of ideas and views leads to greater entrepreneurial initiatives. We show that higher levels of cultural diversity increase the rate of entrepreneurship in the presence of good institutions using evidence from the USA.     

Personality and cognitive skills in network of friends,for multi-ethnic schools

In a multi-ethnic society, friendship among children might be expected to be overwhelmingly shaped by ethnicity and cultural heritage. Using an original panel data-set of classmate networks in multi-ethnic primary schools near Florence, Italy, ($N=396$ children in 2nd and 5th grade), we show instead that cognitive skills and personality traits matter as much as ethnicity in shaping friendships, thus playing the role of elective affinities. We test whether friends affect a child’s personality more than the other way round: to do this, we estimate peer effects. We only find non-significant effect of peers on math grades and a measure of intelligence (KBIT). For personality traits, peer effects are significant only for Extraversion. These findings are crucial for design of immigration policies: rather than emphasizing differences among ethnic groups, a farsighted policy could try to point these elective affinities among individuals.     

Family migration in China: Do migrant children affect parental settlement intention?

This paper investigates the role of migrant children in the permanent settlement intention of their parents. Using two independent survey datasets on Chinese internal migration, we examine whether and how migrant children-related factors are associated with migrant parents’ intention of permanent urban settlement. Our results show that parents with migrant children are more likely to settle in a destination city permanently than those without. The probability of permanent urban settlement intention of parents with migrant children is 49% higher than those without. The results are robust to a series of sensitivity tests. Potential channels for the findings are also explored.     

PARENTS’ EDUCATIONAL BACKGROUND,SUBJECTS “GOOD‐AT” IN SCHOOL AND INCOME: AN EMPIRICAL STUDY*

We analyze the effects of studying mathematics and of parents’ academic profile on the annual labour income of their children in later life. Data was obtained from graduates of departments of economics at major private universities in Japan. They show that respondents who are good at mathematics (and English) have a higher average income, and that the more educated the parents, the more children tend to excel in mathematics.     

Birthplace diversity and economic prosperity

We propose an index of population diversity based on people’s birthplaces and decompose it into a size (share of immigrants) and a variety (diversity of immigrants) component. We show that birthplace diversity is largely uncorrelated with ethnic, linguistic or genetic diversity and that the diversity of immigrants relates positively to measures of economic prosperity. This holds especially for skilled immigrants in richer countries at intermediate levels of cultural proximity. We address endogeneity by specifying a pseudo-gravity model predicting the size and diversity of immigration. The results are robust across specifications and suggestive of skill-complementarities between immigrants and native workers.     

Diversity and innovation

Although the effect of culture on national innovation levels is well-established, previous literature assumes cultural homogeneity within a nation. In this article we analyse two aspects of diversity – ethnic and values – and their impact on national innovation output. We show that ethnic diversity or fractionalization and values diversity are distinct and while the former has a negative effect on innovation, the latter contributes positively. However, countries are bound to have both types of diversity. We find that countries that are ethnically homogenous but diverse in values orientation are the best innovators.