Intergenerational Interactions in Human Capital Accumulation

Intergenerational interactions in human capital accumulation

We analyze an economy populated by a sequence of generations who decide over their consumption levels and the levels of investment in human capital of their immediate descendants. The objective of the paper is to identify the impact of strategic interactions between consecutive generations on the time path of human capital accumulation. To this end, we characterize the Markov perfect equilibriu...

Linking consumption externalities with optimal accumulation of human and physical capital and intergenerational transfers

This paper opens a new perspective from which one can explain the presence of government intervention in education even in the absence of human capital externality. It argues that consumption externalities can provide rationale for government intervention in education. Within the context of overlapping generations economy, it has also been shown that competitive equilibrium either underaccumula...

Taxation and Human Capital Accumulation

How do taxes affect human capital accumulation? This question has been studied extensively in the context of two model classes: overlapping generations (OLG) and infinite horizon (IH) models. These embody very different assumptions about the intergenerational transmission of physical and human capital. OLG models typically abstract from intergenerational linkages, while IH models implicitly ass...

Intergenerational Transmission of Human Capital in Europe: Evidence from SHARE

This paper extends the previous literature on the intergenerational transmission of human capital by exploiting variation in compulsory schooling reforms across nine European countries over the period 1920-1956. My empirical strategy follows an IV approach, instrumenting parental education with years of compulsory schooling. I nd some evidence of a causal relationship between parents' and child...

Income Shocks, Intergenerational Transfers, and Human Capital in Germany