Investments into education - Doing as the parents did

Georg Kirchsteiger; Alexander Christopher Sebald

doi:10.1016/j.euroecorev.2009.09.004

Investments into education - Doing as the parents did

Georg Kirchsteiger, Alexander Christopher Sebald

Department of Economics

3 Citations (Scopus)

Abstract

Empirical evidence suggests that parents with higher levels of education generally attach a higher importance to the education of their children. This implies an intergenerational chain transmitting the attitude towards the formation of human capital from one generation to the next. We incorporate this intergenerational chain into an OLG-model with endogenous human capital formation. In absence of any state intervention such an economy might be characterized by multiple steady states with low or high human capital levels. There are also steady states where the population is permanently divided into different groups with differing human capital and welfare levels. Compulsory schooling is needed to overcome steady states with low human capital and welfare levels. Tax financed education subsidies can lead to further pareto-improvements.

Original language	English
Journal	European Economic Review
Volume	54
Issue number	4
Pages (from-to)	501-516
Number of pages	16
ISSN	0014-2921
DOIs	https://doi.org/10.1016/j.euroecorev.2009.09.004
Publication status	Published - May 2010

Keywords

Faculty of Social Sciences
Human capital formation
Education subsidy
Compulsory schooling
Illiterateness trap

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10.1016/j.euroecorev.2009.09.004

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title = "Investments into education - Doing as the parents did",

abstract = "Empirical evidence suggests that parents with higher levels of education generally attach a higher importance to the education of their children. This implies an intergenerational chain transmitting the attitude towards the formation of human capital from one generation to the next. We incorporate this intergenerational chain into an OLG-model with endogenous human capital formation. In absence of any state intervention such an economy might be characterized by multiple steady states with low or high human capital levels. There are also steady states where the population is permanently divided into different groups with differing human capital and welfare levels. Compulsory schooling is needed to overcome steady states with low human capital and welfare levels. Tax financed education subsidies can lead to further pareto-improvements.",

keywords = "Faculty of Social Sciences, Human capital formation, Education subsidy, Compulsory schooling, Illiterateness trap",

author = "Georg Kirchsteiger and Sebald, {Alexander Christopher}",

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AU - Kirchsteiger, Georg

AU - Sebald, Alexander Christopher

N1 - JEL classification: H23, H52, I2

PY - 2010/5

Y1 - 2010/5

N2 - Empirical evidence suggests that parents with higher levels of education generally attach a higher importance to the education of their children. This implies an intergenerational chain transmitting the attitude towards the formation of human capital from one generation to the next. We incorporate this intergenerational chain into an OLG-model with endogenous human capital formation. In absence of any state intervention such an economy might be characterized by multiple steady states with low or high human capital levels. There are also steady states where the population is permanently divided into different groups with differing human capital and welfare levels. Compulsory schooling is needed to overcome steady states with low human capital and welfare levels. Tax financed education subsidies can lead to further pareto-improvements.

AB - Empirical evidence suggests that parents with higher levels of education generally attach a higher importance to the education of their children. This implies an intergenerational chain transmitting the attitude towards the formation of human capital from one generation to the next. We incorporate this intergenerational chain into an OLG-model with endogenous human capital formation. In absence of any state intervention such an economy might be characterized by multiple steady states with low or high human capital levels. There are also steady states where the population is permanently divided into different groups with differing human capital and welfare levels. Compulsory schooling is needed to overcome steady states with low human capital and welfare levels. Tax financed education subsidies can lead to further pareto-improvements.

KW - Faculty of Social Sciences

KW - Human capital formation

KW - Education subsidy

KW - Compulsory schooling

KW - Illiterateness trap

U2 - 10.1016/j.euroecorev.2009.09.004

DO - 10.1016/j.euroecorev.2009.09.004

M3 - Journal article

SN - 0014-2921

VL - 54

SP - 501

EP - 516

JO - European Economic Review

JF - European Economic Review

IS - 4

ER -

Investments into education - Doing as the parents did

Abstract

Keywords

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