Working Paper: NBER ID: w24537
Authors: Jesse Rothstein
Abstract: Chetty et al. (2014b) show that children from low-income families achieve higher adult incomes, relative to those from higher income families, in some commuting zones (CZs) than in others. I investigate whether children’s educational outcomes help to explain the between-CZ differences. I find little evidence that the quality of schools is a key mechanism driving variation in intergenerational mobility. While CZs with stronger intergenerational income transmission have somewhat stronger transmission of parental income to children’s educational attainment and achievement, on average, neither can explain a large share of the between-CZ variation. Marriage patterns explain two-fifths of the variation in income transmission, human capital accumulation and returns to human capital each explain only one-ninth, and the remainder of the variation (about one-third) reflects differences in earnings between children from high- and low-income families that are not mediated by human capital. This points to job networks and the structure of local labor and marriage markets, rather than the education system, as likely factors influencing intergenerational economic mobility.
Keywords: intergenerational income transmission; educational outcomes; commuting zones; labor market networks; human capital
JEL Codes: I24; I3; J12; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Quality of schools does not mediate intergenerational income transmission (I24) | Variation in intergenerational income transmission (D31) |
| Marriage patterns (J12) | Variation in intergenerational income transmission (D31) |
| Human capital accumulation (J24) | Variation in intergenerational income transmission (D31) |
| Returns to human capital (J24) | Variation in intergenerational income transmission (D31) |
| Parental income (D31) | Children's earnings (J13) |
| Labor market institutions (J08) | Variation in intergenerational mobility (J62) |
| Parental income (D31) | Children's educational outcomes (I21) |