We propose a model of intergenerational transmission of education wherein children belong to either high-educated or low-educated families. Children choose the intensity of their social activities, while parents decide how much educational effort to exert. We characterize the equilibrium and show the conditions under which cultural substitution or complementarity emerges. Using data on adolescents in the United States, we structurally estimate our model and find that, on average, children’s homophily acts as a complement to the educational effort of high-educated parents but as a substitute for the educational effort of low-educated parents. We also perform some policy simulations. We find that policies that subsidize social interactions can backfire for low-educated students because they tend to increase their interactions with other low-educated students, which reduce the education effort of their parents and, thus, their chance of becoming educated.
Vincent Boucher : Department of Economics, Université Laval. CRREP. CREATE.
Carlo L. Del Bello : Italian Tax Agency, Italy.
Fabrizio Panebianco : Catholic University of Milan, Italy.
Thierry Verdier : Paris School of Economics, Ecole des Ponts ParisTech, PUC-Rio, and CEPR
Yves Zenou : Department of Economics, Monash University, CEPR, and IZA
The authors acknowledge the financial support of ERC 324004 Grant TECTACOM, ERC STRATEMOTIONS - GA 324219 and the Spanish Ministry of Economia y Competitividad under Grant ECO2017-87245-R. This research uses data from Add Health, a program directed by Kathleen Mullan Harris and designed by J. Richard Udry, Peter S. Bearman, and Kathleen Mullan Harris at the University of North Carolina at Chapel Hill, and is funded by Grant P01-HD31921 from the Eunice Kennedy Shriver National Institute of Child Health and Human Development, with cooperative funding from 23 other federal agencies and foundations. Special acknowledgment is given to Ronald R. Rindfuss and Barbara Entwisle for assistance in the original design. Information on how to obtain Add Health data files is available on the Add Health website (http://www.cpc.unc.edu/addhealth). No direct support was received from Grant P01-HD31921 for this research.
Replication codes are available here: https://github.com/vincentboucherecn/CulturalTransmission