Article ID Journal Published Year Pages File Type
5066304 European Economic Review 2017 18 Pages PDF
Abstract

We propose a dynastic model where individuals are born into an educated or uneducated environment that they inherit from their parents. We study the impact of social interactions on the correlation in parent-child educational status, independently of any parent-child interaction. When the level of social interactions is decided by a social planner, we show that the correlation in education status between generations decreases very fast as social interactions increase. In turn, when the level of social interactions is decided by the individuals themselves, we show that the intergenerational correlation still decreases, although less rapidly than with exogenous social interactions.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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