DP8932 The Role of Social Networks and Peer Effects in Education Transmission
|Author(s):||Sebastian Bervoets, Antoni Calvó-Armengol, Yves Zenou|
|Publication Date:||April 2012|
|Keyword(s):||education, intergenerational correlation, Social mobility, strong and weak ties|
|JEL(s):||I24, J13, Z13|
|Programme Areas:||Labour Economics, Public Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=8932|
We propose a dynastic model in which individuals are born in an educated or uneducated environment that they inherit from their parents. We study the role of social networks on the correlation in the parent-child educational status independent of any parent-child interaction. We show that the network reduces the intergenerational correlation, promotes social mobility and increases the average education level in the population. We also show that a planner that encourages social mobility also reduces social welfare, hence facing a trade off between these two objectives. When individuals choose the optimal level of social mobility, those born in an uneducated environment always want to leave their environment while the reverse occurs for individuals born in an educated environment.