SWITCHING REGRESSION ESTIMATES OF THE INTERGENERATIONAL PERSISTENCE OF CONSUMPTION.

The influential economic theory of intergenerational transfers predicts a negative connection between credit constraints and intergenerational mobility of consumption. Existing work has used bequest receipt to signal a parent's access to credit markets when investing in his children's human capital....

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Publicado en:Economic Inquiry Vol. 52; no. 4; pp. 1503 - 1525
Autor principal: GUO, SHENG
Formato: Artículo
Publicado: Wiley-Blackwell Oct2014
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      dt: Oct2014
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        atl: SWITCHING REGRESSION ESTIMATES OF THE INTERGENERATIONAL PERSISTENCE OF CONSUMPTION.
      aug:
        au: GUO, SHENG
        affil: Assistant Professor, Department of Economics, Florida International University, 11200 SW 8th Street, DM 318A, Miami, FL 33199
      su:
        United States
        Intergenerational relations
        Human capital
        Credit
        Economic mobility
        Consumption (Economics)
        Economic status
        Inheritance & succession
        Economics
      sug:
        subj:
          Intergenerational relations
          Human capital
          Credit
          Economic mobility
          Consumption (Economics)
          Economic status
          Inheritance & succession
          Economics
          United States
          Other Activities Related to Credit Intermediation
      ab: The influential economic theory of intergenerational transfers predicts a negative connection between credit constraints and intergenerational mobility of consumption. Existing work has used bequest receipt to signal a parent's access to credit markets when investing in his children's human capital. However, measurement error in bequest receipt generates misclassification error and, in turn, attenuation bias. Employing switching regressions with imperfect sample separation to deal with this error, we show that the intergenerational persistence of consumption in the United States for credit constrained families is much higher than that for unconstrained families, contrary to what the theory implies. This means that children from constrained families are more likely to have consumption levels similar to those of their parents than children from unconstrained families. Our results are robust to the choice of bequest variables and other predictive variables in the switching equation. ( JEL C13, D12, E21, J62)
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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