Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284237 
Year of Publication: 
2023
Series/Report no.: 
IFS Working Papers No. 23/11
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
Parental investments significantly impact children's outcomes. Exploiting panel data covering individuals from birth to retirement, we estimate child skill production functions and embed them into an estimated dynastic model in which altruistic mothers and fathers make investments in their children. We find that time investments, educational investments, and assortative matching have a greater impact on generating inequality and intergenerational persistence than cash transfers. While education subsidies can reduce inequality, due to an estimated dynamic complementarity between time investments and education, it is crucial to announce them in advance to allow parents to adjust their investments when their children are young.
Subjects: 
Intergenerational transmission
educational investment
time
educational returns
intergenerational equity
altruism
life cycle hypothesis
estimation
Great Britain
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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