TY  - JOUR
AU  - Han,Song
AU  - Mulligan,Casey B.
TI  - Human Capital, Heterogeneity, and Estimated Degrees of Intergenerational Mobility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7678
PY  - 2000
Y2  - April 2000
UR  - http://www.nber.org/papers/w7678
L1  - http://www.nber.org/papers/w7678.pdf
N1  - Author contact info:
Song Han
Federal Reserve Board
MS 89
Washington, DC  20551
Tel: 202-736-1971
E-Mail: song.han@frb.gov

Casey B. Mulligan
University of Chicago
Department of Economics
1126 East 59th Street
Chicago, IL  60637
Tel: 773/702-9017
Fax: 773/702-8490
E-Mail: c-mulligan@uchicago.edu
AB  - Some of the important implications of the parental investment model of intergenerational mobility have been derived under the assumption that parental income is the main source of heterogeneity.  We explicitly model the variability and inheritability of  innate' earnings ability and the variability of tastes, showing how they affect observed degrees of intergenerational consumption and earnings mobility. Heterogeneity increases the difficulty of detecting the existence of borrowing constrained families. Conversely, the presence of heterogeneity means that economic and linear statistical models of inheritance generate similar intergenerational data on consumption and earnings. In this sense, our findings offer some support for Goldberger's (1989) criticism of human capital models of inheritance. Finally, we suggest that any cross-country differences in intergenerational earnings mobility are more readily interpreted according to the heterogeneity of inherited ability, rather than optimal family responses to country-specific institutions for accumulating human capital.
ER  -