This thesis is a collection of three essays with contributions to the intergenerational and intra-generational mobility literature. The essay on full risk insurance and measurement error examines the likelihood that measurement error may reconcile observed departures from perfect rank immobility in insurable consumption with the mobility predictions of full risk insurance, by generating spurious rank-breaking transitions. The essay shows that under certain assumptions full risk insurance predicts perfect rank immobility and that there exists ranges of error covariance matrices for which the mobility predictions of full risk insurance plus measurement error can not be rejected in the Peruvian data. A novel approach to test these mobility predictions is presented. The essay on discrete time-states Markov chain models applied to welfare dynamics shows that models with higher order may fit data better than the popular first-order, stationary model, and that the order of the chain, in turn, affects the estimation of equilibrium distributions. A best-practice methodology to conduct homogeneity tests between two samples with different optimal order is proposed, and an index by Shorrocks, based on the trace of the transition matrix, is extended to discrete Markov chain models with higher order. The essay on cohort heterogeneity in intergenerational mobility of education shows how cohort heterogeneity affects the analysis of cross-group homogeneity and long-term prospects of a welfare variable, based on transition matrix analysis. The essay compares the transition matrices of Peruvian groups divided by gender and ethnicity and finds genuine reductions in heterogeneity of the mobility regimes between male and female and between indigenous and non-indigenous groups among the youngest cohorts. The essay proposes a methodology to conduct first-order stochastic dominance analysis with equilibrium distributions and shows that among the youngest cohorts past stochastic dominance of male over females and non-indigenous over indigenous disappear in the long term.

<p>This study examines the effect on school achievement of a policy such as hostels, aimed at</p><p>giving children from a poor socioeconomic background an opportunity to receive education.</p><p>Data is collected from two different schools in a district in Andhra Pradesh, India, in which</p><p>both hostel students and day-scholar students, having a similar background, are studying.</p><p>Exam scores for three different subjects are used as dependent variables in the analysis. The</p><p>results indicate that private hostels do have a positive effect on achievement in all subjects,</p><p>thereby contributing to reducing the large gap in school achievement between different</p><p>socioeconomic groups</p>

This study examines the effect on school achievement of a policy such as hostels, aimed at giving children from a poor socioeconomic background an opportunity to receive education. Data is collected from two different schools in a district in Andhra Pradesh, India, in which both hostel students and day-scholar students, having a similar background, are studying. Exam scores for three different subjects are used as dependent variables in the analysis. The results indicate that private hostels do have a positive effect on achievement in all subjects, thereby contributing to reducing the large gap in school achievement between different socioeconomic groups

This dissertation contains three essays. The first and second essays examine intergenerational mobility in earnings in Brazil using a data set spanning three generations. I use data from PNAD{a nationally representative household survey in Brazil. I build a three-generations data set consisting of 5,125 grandfather-father- son triplets by restricting the sample to households with adult sons. The first essay estimates some relationships between a child's earnings and family background implied by the Becker-Tomes model. I find that the estimates contradict some of its predictions, like the negative relationship between child's earnings and grandparent's earnings when controlling for parent's earnings. I propose a modified version of the Becker-Tomes model and find that the estimates are consistent with its predictions. I find that family background explains 34.9% of the variation in earnings among young males who live with their parents. If it were possible to eliminate the differences in investment in the children's human capital, the variation in earnings would fall by no more than 21.1%. Additionally, if there were no differences in endowments among children, the variation in earnings would fall by no less than 26%. The second essay examines the evolution of the intergenerational elasticity across generations and im- plications of marriage, education and fertility on mobility. I find that the estimate of the intergenerational elasticity in earnings is 0.847. The elasticity of earnings between son-in-law and father-in-law, 0.89, is approximately the same as the elasticity between son and father, 0.9. Additionally, controlling for fathers' percentile in the earnings distribution, each additional sibling decreases the sons' percentile by 1.77 percentiles. The third essay estimates an indicator of the optimal investment in electricity generation in Texas, and the associated efficiency gains. The essay presents a method to estimate the optimal investment in each technology available to generate electricity. The estimation considers the expected entry and exit of generation plants, future fuel prices, different demand elasticities and a potential carbon allowance mar- kets. Considering a carbon allowance price equal to two times the level in Europe, the optimal investment in electricity generation in Texas is zero.

My dissertation consists of three essays in which I document trends in earnings and income volatility, estimate potential causal mechanisms for changing volatility, and examine the long-term consequences of parental income volatility for children. In essay 2 I document trends in earnings and income volatility of individuals and families using matched data in the March Current Population survey from 1973 to 2009. Essay 3 advances the literature on volatility, using matched data from the CPS to identify demographic and labor market correlates of earnings volatility within education-birth year cohorts. This study collapses the cross-sectional CPS into a pseudo-panel and then estimates the association between earnings volatility and race, local economic activity, and industry, accounting for endogeneity and sample selection bias. In essay 4 I use data linked across generations in the Panel Study of Income Dynamics to estimate the relationship between exposure to volatile income during childhood and a set of socioeconomic outcomes in adulthood. The empirical framework is an augmented intergenerational income mobility model that includes controls for income volatility. I find that family income volatility rose by 38 percent over the past four decades, likely driven both by rising volatility of earnings and non means-tested non-labor income. Rising family income volatility occurs across race, education, and family structure. From essay 3, I find that individuals with lower mean earnings have higher earnings volatility. Earnings volatility is also weakly related to race, decreases when young and then rises while workers are still within prime working years. Industry and local economic conditions are significantly related to the occurrence of earnings volatility after accounting for education, though these links differ between men and women. Finally, when examining the intergenerational consequences of volatility, a weak negative association occurs between family income instability during childhood and adult educational outcomes in essay 4.

[pt] Nesta dissertação avaliamos a transmissão intergeracional de capital humano no Brasil, separando o efeito da escolaridade de mãe e pai sobre a defasagem idade-série de filhos e filhas na escola. A partir de dados das PNADs de 1988 e 1996, estimativas através do método de Mínimos Quadrados Ordinários indicam presença de fortes não-linearidades nessas relações e efeitos diferentes para meninos e meninas. Utilizando séries históricas de escolas e professores por Unidade da Federação do IBGE como fonte de identificação do efeito causal de escolaridade dos pais sobre o desempenho dos filhos, o método de Mínimos Quadrados em Dois Estágios com variáveis instrumentais aponta efeitos significantes tanto de escolaridade da mãe quanto do pai, mas não permite distingui-los adequadamente. / [en] In this work we study the intergenerational transmission of human capital in Brazil. We evaluate the effect of both mother and father`s education, measured as years of schooling, on their children`s school performance. Using data from 1988 and 1996 PNADs we find strong non-linearities in our OLS estimates, as well as different effects on boys and girls. We then isolate pure causal effect of parent´s schooling on their offpring´s by using historical series of schools and theachers as instruments for parent´s education in our 2SLS-IV strategy. The results show strong evidence of a direct causal effect of parent´s schooling on their children´s, though our strategy is unable to separate mother´s and father´s effects properly

Using pooled European Social Survey data (Rounds 4-7, 2008-2014), we investigate the relationship between intergenerational educational mobility and subjective wellbeing (SWB) for young Europeans (N = 16,050 individuals aged 25-34 from 18 countries). Previous research has been struggling with inconclusive results due to the methodological challenge of disentangling the independent (i.e., "net") effect of social mobility over and above the effects of social origin and destination. We contribute to this line of research by contrasting mobility effects estimated in a conventional linear regression framework with net mobility effects estimated by (non-linear) diagonal mobility models (DMM). We show how model selection influences estimates of mobility effects and how different specifications lead to radically different findings. Using DMM, we estimate how intergenerational educational mobility affects the SWB of young Europeans, differentiating between downward and upward mobility and different country groups. Our results suggest that status loss/gain across generations affects young adults' SWB in addition to the level-effect of ending up in a lower/ higher status position only in Continental Europe.

abstract: The dissertation consists of three essays that deal with variations in economic growth and development across space and time. The essays in particular explore the importance of differences in occupational structures in various settings. The first chapter documents that intergenerational occupational persistence is significantly higher in poor countries even after controlling for cross-country differences in occupational structures. Based on this empirical fact, I posit that high occupational persistence in poor countries is symptomatic of underlying talent misallocation. Constraints on education financing force sons to choose fathers' occupations over the occupations of their comparative advantage. A version of Roy (1951) model of occupational choice is developed to quantify the impact of occupational misallocation on aggregate productivity. I find that output per worker reduces to a third of the benchmark US economy for the country with the highest level of occupational persistence. In the second chapter, I use occupational prestige as a proxy of social status to estimate intergenerational occupational mobility for 50 countries spanning the breadth of world's income distribution for both sons and daughters. I find that although relative mobility varies significantly across countries, the correlation between relative mobility and GDP per capita is only mildly positive for sons and is close to zero for daughters. I also consider two measures of absolute mobility: the propensity to move across quartiles and the propensity to move relative to father's occupational prestige. Similar to relative mobility, the first measure of absolute mobility is uncorrelated with GDP per capita. The second measure, however, is positively correlated with GDP per capita with correlations being significantly higher for sons compared to daughters. The third chapter analyses to what extent the growth in productivity witnessed by India during 1983--2004 can be explained by a better allocation of workers across occupations. I first document that the propensity to work in high-skilled occupations relative to high-caste men increased manifold for high-caste women, low-caste men and low-caste women during this period. Given that innate talent in these occupations is likely to be independent across groups, the chapter argues that the occupational distribution in the 1980s represented talent misallocation in which workers from many groups faced significant barriers to practice an occupation of their comparative advantage. I find that these barriers can explain 15--21\% of the observed growth in output per worker during the period from 1983--2004. / Dissertation/Thesis / Doctoral Dissertation Economics 2015

This paper assesses the role of literacy skills as an equalizer in both educational outcomes and educational opportunities. First, by linking two surveys of adult skills for 11 OECD countries (PIAAC - Survey of Adult Skills (conducted in mid-1990s) and IALS - International Adult Literacy Survey (conducted in 2011)), the relationship between performance (average literacy test scores) across countries and within-country skill inequality (dispersion in literacy test scores) is examined. Although Okun's style tradeoff could suggest that there is a tradeoff between efficiency and equality, in this analysis the opposite holds true. Countries with higher average literacy test scores have, at the same time, higher equality in literacy test scores. Second, the role of intergenerational educational mobility (one aspect of equality of opportunity) across countries on both average literacy scores and equality in literacy scores is estimated. There is a significant effect of parental educational levels on children's test scores in all countries, but there is a substantial cross-country variation in the size of the coefficients, which suggests that families play different roles in the transmission of educational skills across countries. Furthermore, this paper finds that an increase in average literacy scores (particularly, improvement in the literacy skills of the low-skilled adults) is positively associated with higher intergenerational educational mobility and higher equality of literacy test scores. Third, by decomposing differences in average literacy scores between the surveys, this paper finds that although increasing educational attainment was the primary driver behind the rise in average literacy scores, literacy scores for each educational age group declined in all countries, which may imply a decrease in educational efficiency. From a policy perspective, increases in access to education and rises in educational attainment alone (although extremely beneficial) are not enough. A focus on educational reform and better quality of education are required in order to improve educational efficiency. Additionally, family policies and an active welfare state may be necessary in order to tackle inequalities. / Series: INEQ Working Paper Series

Essay 1: We use data from a large sample of adoptees born in Sweden to decompose the intergenerational persistence in health inequality across generations into one pre-birth component, measured by the biological parents’ longevity, and one post-birth component, measured by the adopting parents’ longevity. We find that most of the health inequality is transmitted via pre-birth factors. In the second part of the paper, we study the background to why children of parents with better educational attainments have better health by decomposing the association into one component attributed to the education of the biological parents and one to the adopting ones. We find that the association can mostly be attributed to the adopting parents, suggesting that parental resources per se, rather than pre-birth (genetic) differences, make up the parental education gradient in child health. Essay 2: There are large differences in health across neighborhoods in Sweden. To try to answer if there is a causal link between neighborhood conditions in childhood and youth health, I apply two different empirical strategies. First, I use population wide data on families living in different areas in Sweden, and estimate the effects of childhood neighborhood on youth health using data on families that move across the country. Since the choice of moving and where to live is endogenous, I exploit the timing of moves and estimate the effect of siblings’ different exposure time to neighborhoods. The second approach utilizes a governmental policy that assigned refugees to their initial neighborhood in Sweden, potentially offering exogenous variation in neighborhoods and allowing me to study the effect of different neighborhoods on youth health. The findings from the two strategies together imply that there are significant neighborhood effects on youth health, but that the effects are contemporaneous and there is no evidence of exposure time effects. Essay 3: Previous research has shown that birth order affects outcomes such as educational achievements, IQ and earnings. The mechanisms behind these effects are still largely unknown. We examine birth order effects on health, and whether health at young age could be a transmission channel for birth order effects observed later in life. Our results show that firstborn children have worse health at birth. This disadvantage is reversed in early age and later-born siblings are more likely to be hospitalized for injuries and avoidable conditions. In adolescence and as young adults, younger siblings are more likely to be of poor mental health and to be admitted to hospital for alcohol induced health conditions. We also test for reverse causality by estimating fertility responses to the health of existing children. Overall our results suggest that birth order effects are due to differential parental investment because parents’ time and resources are limited. Essay 4: We study the short-, medium- and long-term consequences of health at birth using administrative data from Sweden for individuals born in the years 1973-1979. We contribute to a better understanding of the consequences of early life health by contrasting the effects of birth weight with two other measures of neonatal health: the length and the head circumference of the newborn. Our findings suggest that the use of birth weight alone might lead to an underestimation of the importance of early health. Furthermore, we find that there is a persistent effect of neonatal health on a variety of human capital measures in adolescence and adulthood.