Abstract:
High inequality goes hand in hand with low intergenerational earnings mobility across countries. In an overlapping generation’s model, calibrated to the US, education policies are endogenised via probabilistic voting. Exploiting cross-country variations in the bias in voter turnout towards the educated, I replicate the negative relation between inequality and public education expenditure and account for nearly one-quarter of the differences in inequality and mobility. For the US, I find that compulsory voting could foster mobility, whereas inequality is hardly affected. Differences across countries in tertiary education characteristics, in particular the college premium, account for 65% of the differences in inequality.

JEL:
E24, H52, I23

Abstract:
How much of social mobility and income inequality is due to initial opportunities relative to adult income risk? Previous studies have provided very wide estimates due to data limitations. To provide a more precise answer this article builds on a standard heterogeneous agent life cycle model with idiosyncratic income shocks. We propose that fertility differentials between rich and poor households can lead to substantial differences in the resources available for children, which can be important for their adult outcomes. Accounting for this is essential for the proper evaluation of initial opportunities so we extend the model to introduce the role of families through endogenous fertility, family transfers and education. We find that initial conditions as of age 13 account for more of adult income inequality than do labor income shocks. Moreover, fertility differentials and family transfers are found to account for over 50% of the social mobility in the data.

JEL:
D91, J13, J24, J62

Abstract:
This paper investigates the intergenerational transmission of gender norms. The particular norm under consideration is the traditional view that it is the role of the mother to look after young children and the role of the father to be the breadwinner. A model of identity formation is developed, where a child's gender norm is endogenous to two main sources of gender socialisation: her family on the one hand, and society at large on the other. Using data from the Next Steps survey and the International Social Survey Programme, this study examines the intergenerational transmission of gender norms in England by investigating how family and society norms affect the development of children's beliefs. Findings indicate between-sex heterogeneity in the transmission of gender norms from parents to children. While boys raised in modern families (i.e. where the mother is the breadwinner) are less likely to develop traditional norms, girls raised in modern families are actually more likely to do so; in opposition to their family's but in line with society's norm. Examining further outcomes associated with gender norms, we find that girls raised in modern families are also less likely to state that being able to earn high wages is important for them, and are less likely to pursue a science degree at university level. Using the predictions of our theoretical model, these empirical findings can be explained by between-sex heterogeneity in preferences for conformity to the family. Evidence is presented supporting this theoretical prediction.

JEL:
D10, J16, Z13