Working Paper: CEPR ID: DP8932
Authors: Sebastian Bervoets; Antoni Calvarmengol; Yves Zenou
Abstract: We propose a dynastic model in which individuals are born in an educated or uneducated environment that they inherit from their parents. We study the role of social networks on the correlation in the parent-child educational status independent of any parent-child interaction. We show that the network reduces the intergenerational correlation, promotes social mobility and increases the average education level in the population. We also show that a planner that encourages social mobility also reduces social welfare, hence facing a trade off between these two objectives. When individuals choose the optimal level of social mobility, those born in an uneducated environment always want to leave their environment while the reverse occurs for individuals born in an educated environment.
Keywords: education; intergenerational correlation; social mobility; strong and weak ties
JEL Codes: I24; J13; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social networks (Z13) | educational status of children (I24) |
| strong ties (Z13) | educational outcomes (I26) |
| uneducated environments (I25) | negative peer effects (C92) |
| educational environments (I29) | educational outcomes (I26) |
| increased interactions with weak ties (Z13) | reduced intergenerational correlation in education (I24) |
| promoting social mobility (J62) | decrease in overall social welfare (D69) |