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Like Father, Like Son: Social Networks, Human Capital Investment, and Social Mobility

Calvó-Armengol, Antoni and Jackson, Matthew O. (2005) Like Father, Like Son: Social Networks, Human Capital Investment, and Social Mobility. Social Science Working Paper, 1242. California Institute of Technology , Pasadena, CA. (Unpublished)

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We build a model where an individual sees higher returns to investments in human capital when their neighbors in a social network have higher levels of human capital. We show that the correlation of human capital across generations of a given family is directly related to the sensitivity of individual investment decisions to the state of the social network. Increasing the sensitivity leads to increased intergenerational correlation, as well as more costly investment decisions on average in the society. We calibrate a simple threshold version of the model to data from a variety of EU nations. We also show how directly analyzing sensitivity of decisions to social circumstances can lead to information that is not captured by intergenerational correlation.

Item Type:Report or Paper (Working Paper)
Jackson, Matthew O.0000-0001-9846-4249
Additional Information:Support from the Fundación Ramón Areces, the Spanish Ministry of Education through grant BEC2002-02130, and the Barcelona Economics Program CREA is gratefully acknowledged. Financial support from the Guggenheim Foundation, the Lee Center for Advanced Networking, the Center for Advanced Studies in the Behavioral Sciences, and the NSF under grant SES-0316493 is gratefully acknowledged. We are very grateful to Simona Comi for making her data available to us. We also thank Rachel Kranton and Alison Watts for helpful conversations and discussions.
Group:Social Science Working Papers
Funding AgencyGrant Number
Fundación Ramón ArecesUNSPECIFIED
Ministerio de Educacion y Ciencia (MEC)UNSPECIFIED
Barcelona Economics Program CREAUNSPECIFIED
John Simon Guggenheim FoundationUNSPECIFIED
Caltech Lee Center for Advanced NetworkingUNSPECIFIED
Center for Advanced Study in the Behavioral SciencesUNSPECIFIED
Subject Keywords:Social Mobility, Networks, Labor Markets, Human Capital
Series Name:Social Science Working Paper
Issue or Number:1242
Classification Code:JEL: A14, J64, J31, J70
Record Number:CaltechAUTHORS:20170802-113029102
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79764
Deposited By: Hanna Storlie
Deposited On:02 Aug 2017 18:46
Last Modified:03 Oct 2019 18:23

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