A Note on intergenerational mobility and intrahousehold balance of power

Abstract

This paper studies how family's decisions about investments in children are an important determinant of adults' earnings, and thus of persistence in income differentials. We propose a model of investment in children that allows parents to have different preferences using a collective household framework, and investigate how the intrahousehold distribution of power affects children outcomes and the transmission of economic status across generations. The results suggest that failure to account for intrahousehold balance of power as source of household heterogeneity might affect the interpretation of the structural parameters of interest and the evaluation of earnings persistence. © 2010 The Author. Bulletin of Economic Research © 2010 Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research.