joint with Jorgen Modalsli,Claudia Olivetti and Laura Salisbury.

Abstract:

This paper explores the connection between intergenerational economic mobility and the entry of women into the labor force. We propose a simple statistical model of intergenerational transmission, in which children’s human capital is a function of parental money and time inputs. We derive the father-son (and father-daughter) intergenerational elasticities (IGEs) under two regimes: one in which mothers devote all their time to childrearing, and one in which mothers split their time between market work and childrearing. We find that the impact of mothers’ entry into the labor force on the father-child IGE depends on three key factors: (i) the nature of sorting in the marriage market; (ii)the relative importance of parental time and money in the determination of child’s earnings; and (iii) selection of mothers into labor force participation. We discuss the circumstances under which the entry of mothers into the labor force may have contributed to a decline in the father-son and father-daughter IGEs in Norway. 

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