Working Paper: NBER ID: w19348
Authors: Hoyt Bleakley; Joseph P. Ferrie
Abstract: Does the lack of wealth constrain parents' investments in the human capital of their descendants? We conduct a fifty-year followup of an episode in which such constraints would have been plausibly relaxed by a random allocation of wealth to families. We track descendants of those eligible to win in Georgia's Cherokee Land Lottery of 1832, which had nearly universal participation among adult white males. Winners received close to the median level of wealth - a large financial windfall orthogonal to parents' underlying characteristics that might have also affected their children's human capital. Although winners had slightly more children than non-winners, they did not send them to school more. Sons of winners have no better adult outcomes (wealth, income, literacy) than the sons of non-winners, and winners' grandchildren do not have higher literacy or school attendance than non-winners' grandchildren. This suggests only a limited role for family financial resources in the transmission of human capital across generations and a potentially more important role for other factors that persist through family lines.
Keywords: human capital; wealth; intergenerational transmission; lottery; education
JEL Codes: J01; J13; J24; J62; N11; N31; O12; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| wealth shock (G59) | better human capital outcomes (J24) |
| winning the lottery (H27) | school attendance of children (I21) |
| winning the lottery (H27) | literacy rates of children (I21) |
| winning the lottery (H27) | educational outcomes of grandchildren (I24) |
| random allocation of wealth through the lottery (H27) | human capital of the descendants of the winners (J24) |