Discussion Paper Details

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Title: Education Transmission and Network Formation

Author(s): Vincent Boucher, Carlo Del Bello, Fabrizio Panebianco, Thierry Verdier and Yves Zenou

Publication Date: July 2020

Keyword(s): Education and Social Networks

Programme Area(s): Labour Economics

Abstract: We propose a model of intergenerational transmission of education wherein children belong to either high-educated or low-educated families. Children choose the intensity of their social activities, while parents decide how much educational effort to exert. We characterize the equilibrium and show the conditions under which cultural substitution or complementarity emerges. Using data on adolescents in the United States, we structurally estimate our model and find that, on average, children's homophily acts as a complement to the educational effort of high-educated parents but as a substitute for the educational effort of low-educated parents. We also perform some policy simulations. We find that policies that subsidize social interactions can backfire for low-educated students because they tend to increase their interactions with other low-educated students, which reduce the education effort of their parents and, thus, their chance of becoming educated.

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Bibliographic Reference

Boucher, V, Del Bello, C, Panebianco, F, Verdier, T and Zenou, Y. 2020. 'Education Transmission and Network Formation'. London, Centre for Economic Policy Research.