Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 1, 2019 erstellt
Beschreibung:
The intergenerational income elasticity is a crucial measure of income mobility. In this paper we develop a structural model to examine the channels through which this elasticity operates. Using data from the Panel Study of Income Dynamics, we separately identify the human capital and the financial components. The human capital component examines the transmission of human capital, independent of financial investments while the financial component examines the impact of income that is uncorrelated with human capital, that is, exogenous income. Using a two-stage framework, we show that the intergenerational income elasticity operates through both channels. Moreover, our estimates show that the financial component may have a larger effect than previously estimated, plausibly attributing to 36 percent of intergenerational income transmission. Indeed, this result holds even when the financial component is defined in an incredibly narrow manner. This suggests that cash payments could promote intergenerational mobility