[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/5686.html
   My bibliography  Save this paper

Investments into Education - Doing as the Parents Did

Author

Listed:
  • Kirchsteiger, Georg
  • Sebald, Alexander
Abstract
Empirical evidence suggests that parents with higher levels of education generally also attach a higher importance to the education of their children. This implies an intergenerational chain transmitting the attitude towards the formation of human capital from one generation to the next. We incorporate this intergenerational chain into an OLG-model with endogenous human capital formation. In absence of any state intervention such an economy might be characterized by multiple steady states. A temporary public investment into human capital formation is then needed for a transition from a steady state with low human capital levels to one with a higher human capital level. Furthermore, it can be shown that even the best steady state is suboptimal when the human capital is privately provided. This inefficiency can be overcome by a permanent public subsidy for education.

Suggested Citation

  • Kirchsteiger, Georg & Sebald, Alexander, 2006. "Investments into Education - Doing as the Parents Did," CEPR Discussion Papers 5686, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:5686
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP5686
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Engelmann, Dirk & Fischbacher, Urs, 2009. "Indirect reciprocity and strategic reputation building in an experimental helping game," Games and Economic Behavior, Elsevier, vol. 67(2), pages 399-407, November.
    2. Luc Champarnaud & Victor Ginsburgh & Philippe Michel, 2008. "Can public arts education replace arts subsidization?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 32(2), pages 109-126, June.
    3. Becker, Gary S & Tomes, Nigel, 1976. "Child Endowments and the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 143-162, August.
    4. Galor, Oded & Tsiddon, Daniel, 1997. "Technological Progress, Mobility, and Economic Growth," American Economic Review, American Economic Association, vol. 87(3), pages 363-382, June.
    5. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    6. Bruce Sacerdote, 2002. "The Nature and Nurture of Economic Outcomes," American Economic Review, American Economic Association, vol. 92(2), pages 344-348, May.
    7. Galor, Oded & Tsiddon, Daniel, 1997. "The Distribution of Human Capital and Economic Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 93-124, March.
    8. Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, vol. 54(3), pages 339-359, July.
    9. Luc Arrondel & Andre Masson, 2001. "Family Transfers Involving Three Generations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(3), pages 415-443, September.
    10. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    11. Theodore C. Bergstrom, 1996. "Economics in a Family Way," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1903-1934, December.
    12. repec:bla:scandj:v:103:y:2001:i:3:p:415-43 is not listed on IDEAS
    13. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 151-182, July.
    14. Hauk, Esther & Saez-Marti, Maria, 2002. "On the Cultural Transmission of Corruption," Journal of Economic Theory, Elsevier, vol. 107(2), pages 311-335, December.
    15. Kirchsteiger, Georg & Sebald, Alexander, 2010. "Investments into education--Doing as the parents did," European Economic Review, Elsevier, vol. 54(4), pages 501-516, May.
    16. Hendricks, Lutz, 2007. "The intergenerational persistence of lifetime earnings," European Economic Review, Elsevier, vol. 51(1), pages 125-144, January.
    17. Alberto Bisin & Giorgio Topa, 2003. "Empirical Models of Cultural Transmission," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 363-375, 04/05.
    18. Theodore C. Bergstrom, 1996. "Economics in a Family Way," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1903-1934, December.
    19. M.A. Nowak & K. Sigmund, 1998. "Evolution of Indirect Reciprocity by Image Scoring/ The Dynamics of Indirect Reciprocity," Working Papers ir98040, International Institute for Applied Systems Analysis.
    20. Samuel Bowles & Herbert Gintis, 2002. "The Inheritance of Inequality," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 3-30, Summer.
    21. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    22. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
    23. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, vol. 67(6), pages 1295-1340, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kirchsteiger, Georg & Sebald, Alexander, 2010. "Investments into education--Doing as the parents did," European Economic Review, Elsevier, vol. 54(4), pages 501-516, May.
    2. Carlos Bethencourt & Lars Kunze, 2019. "Like Father, Like Son: Inheriting and Bequeathing," German Economic Review, Verein für Socialpolitik, vol. 20(2), pages 194-216, May.
    3. Holger Strulik, 2013. "School Attendance And Child Labor—A Model Of Collective Behavior," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 246-277, April.
    4. repec:zbw:rwirep:0318 is not listed on IDEAS
    5. Yoko Mimura, 2014. "Family Characteristics and Educational Expenditures in Japan and the United States," Japanese Economy, Taylor & Francis Journals, vol. 40(1), pages 5-28.
    6. Bonein, Aurélie & Serra, Daniel, 2007. "Another experimental look at reciprocal behavior: indirect reciprocity," MPRA Paper 3257, University Library of Munich, Germany, revised Mar 2007.
    7. Elvana Hana & Arsena Gjipali, 2010. "What Determines Upper Secondary School Participation? - Intergenerational Effects Of Education Outcomes In Albania," Journal Articles, Center For Economic Analyses, pages 17-31, June.
    8. Chih Ming Tan & Xiao Wang & Xiaobo Zhang, 2024. "It's all in the stars: The Chinese zodiac and the effects of parental investments on offspring's cognitive and noncognitive skill development," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(3), pages 877-920, July.
    9. Corbu Luminița-Claudia, 2020. "Erasmus+ programs-the need to create a competitive space of the Romanian education system," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 14(1), pages 1071-1082, July.
    10. J. Ignacio Gimenez-Nadal & José Alberto Molina & Yu Zhu, 2018. "Intergenerational mobility of housework time in the United Kingdom," Review of Economics of the Household, Springer, vol. 16(4), pages 911-937, December.
    11. Lars Kunze, 2012. "Like Father, Like Son: Inheriting and Bequeathing," Ruhr Economic Papers 0318, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    12. Debora Di Gioacchino & Laura Sabani & Stefano Usai, 2022. "Intergenerational Upward (Im)mobility and Political Support of Public Education Spending," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 8(1), pages 49-76, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arrondel, Luc & Masson, Andre, 2006. "Altruism, exchange or indirect reciprocity: what do the data on family transfers show?," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 14, pages 971-1053, Elsevier.
    2. Paul J. Zak, 2002. "Genetics, family structure, and economic growth," Journal of Evolutionary Economics, Springer, vol. 12(3), pages 343-365.
    3. Yang‐Ming Chang & Dennis L. Weisman, 2005. "Sibling Rivalry and Strategic Parental Transfers," Southern Economic Journal, John Wiley & Sons, vol. 71(4), pages 821-836, April.
    4. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    5. repec:dau:papers:123456789/11242 is not listed on IDEAS
    6. Ben-Halima, B. & Chusseau, N. & Hellier, J., 2014. "Skill premia and intergenerational education mobility: The French case," Economics of Education Review, Elsevier, vol. 39(C), pages 50-64.
    7. Ribar, David C. & Wilhelm, Mark O., 2006. "Exchange, role modeling and the intergenerational transmission of elder support attitudes: Evidence from three generations of Mexican-Americans," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(3), pages 514-531, June.
    8. Alonso-Carrera, Jaime & Caballé, Jordi & Raurich, Xavier, 2012. "Fiscal policy, composition of intergenerational transfers, and income distribution," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 62-84.
    9. Yang-Ming Chang & Dennis L. Weisman, 2005. "Sibling Rivalry and Strategic Parental Transfers," Southern Economic Journal, Southern Economic Association, vol. 71(4), pages 821-836, April.
    10. Michele Bernasconi & Paola Profeta, 2007. "Redistribution or Education? The Political Economy of the Social Race," CESifo Working Paper Series 1934, CESifo.
    11. Redzo Mujcic & Andreas Leibbrandt, 2018. "Indirect Reciprocity and Prosocial Behaviour: Evidence from a Natural Field Experiment," Economic Journal, Royal Economic Society, vol. 128(611), pages 1683-1699, June.
    12. Alger, Ingela & Lehmann, Laurent & Weibull, Jörgen W., 2018. "Evolution of preferences in group-structured populations: genes, guns, and culture," IAST Working Papers 18-73, Institute for Advanced Study in Toulouse (IAST), revised Oct 2019.
    13. Michael Grimm, 2003. "Family and economic growth: A review," Mathematical Population Studies, Taylor & Francis Journals, vol. 10(3), pages 145-173.
    14. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    15. Katarina Nordblom & Henry Ohlsson, 2011. "Bequests, gifts, and education: links between intergenerational transfers," Empirical Economics, Springer, vol. 40(2), pages 343-358, April.
    16. Alejandro T. Moreno-Okuno & Alejandro Mosiño, 2017. "A theory of sequential group reciprocity," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 26(1), pages 1-19, December.
    17. Stanca, Luca, 2009. "Measuring indirect reciprocity: Whose back do we scratch?," Journal of Economic Psychology, Elsevier, vol. 30(2), pages 190-202, April.
    18. Nunley, John M. & Seals Jr., Richard Alan, 2011. "Child-custody reform, marital investment in children, and the labor supply of married mothers," Labour Economics, Elsevier, vol. 18(1), pages 14-24, January.
    19. Bernasconi, Michele & Profeta, Paola, 2012. "Public education and redistribution when talents are mismatched," European Economic Review, Elsevier, vol. 56(1), pages 84-96.
    20. Yang-Ming Chang & Dennis L. Weisman, 2005. "Sibling Rivalry and Strategic Parental Transfers," Southern Economic Journal, John Wiley & Sons, vol. 71(4), pages 821-836, April.
    21. Pinghan Liang & Juanjuan Meng, 2023. "Paying it forward: an experimental study on social connections and indirect reciprocity," Review of Economic Design, Springer;Society for Economic Design, vol. 27(2), pages 387-417, June.

    More about this item

    Keywords

    Education subsidy; Human capital formation; Indirect reciprocity;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I2 - Health, Education, and Welfare - - Education

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:5686. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.