Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 23/2015: Intergenerational Mobility and the Timing of Parental Income.

Pedro Carneiro (), Italo Lopez Garcia (), Kjell Gunnar Salvanes () and Emma Tominey ()
Additional contact information
Pedro Carneiro: University College London, Postal: University College London, London, UK
Italo Lopez Garcia: RAND Corporation, Postal: Rand Corporation, 1776 Main Street, Santa Monica, California 90401-3208, USA, USA
Kjell Gunnar Salvanes: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Emma Tominey: University of York, Postal: University of York, York, UK

Abstract: We extend the standard intergenerational mobility literature by modelling individual outcomes as a function of the whole history of parental income, using data from Norway. We nd that, conditional on permanent income, education is maximized when income is balanced between the early childhood and middle childhood years. In addition, there is an advantage to having income occur in late adolescence rather than in early childhood. These result are consistent with a model of parental investments in children with multiple periods of childhood, income shocks, imperfect insurance, dynamic complementarity, and uncertainty about the production function and the ability of the child.

Keywords: Child human capital; intergenerational mobility; parental income timing; semiparametric estimation.

JEL-codes: E24; J24

43 pages, October 12, 2015

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DP%2023.pdf PDF-file 
DP%2023%20web_appendix_CGST2015.pdf PDF-file Online Appendix

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