Parental Priorities and Economic Inequality

by Mulligan, Casey B.

• ISBN13: 9780226548401
• ISBN10: 0226548406
• Format: Paperback
• Copyright: 1997-12-01
• Publisher: Univ of Chicago Pr

Summary

What determines whether children grow up to be rich or poor? Arguing that parental actions are some of the most important sources of wealth inequality, Casey B. Mulligan investigates the transmission of economic status from one generation to the next by constructing an economic model of parental preferences. In Mulligan's model, parents determine the degree of their altruistic concern for their children and spend time with and resources on them accordingly--just as they might make choices about how they spend money. Mulligan tests his model against both old and new evidence on the intergenerational transmission of consumption, earnings, and wealth, including models that emphasize "financial constraints." One major prediction of Mulligan's model confirmed by the evidence is that children of wealthy parents typically spend more than they earn. Mulligan's innovative approach can also help explain other important behavior, such as charitable giving and "corporate loyalty," and will appeal to a wide range of quantitatively oriented social scientists and sociobiologists.

Author Biography

Casey B. Mulligan is assistant professor of economics at the University of Chicago.

Table of Contents

List of Illustrations

List of Tables

Acknowledgments

The Argument for Parental Priorities

Indifference Curve Diagrams as Models of Parental Priorities

Two Models of Opportunity and Intergenerational Mobility

How Altruism Is Influenced by Economic Status

Taxation and Intergenerational Mobility in the Three Models

The Evolution of Economic Inequality in the United States

The Intergenerational Dynamics of Consumption, Earnings, Income, and Wealth

Borrowing Constraints and the Persistence of Inequality

The Biological Origins of Altruism

Classical Discussions of Altruism

Intergenerational Altruism and Inequality within the Family

Altruism and Giving beyond the Family

Altruism and the Principal-Agent Problem

Conclusions A Guide to Mathematical Notation

References

Index

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