Discussion paper

DP14997 Education Transmission and Network Formation

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.


Boucher, V, C Del Bello, F Panebianco, T Verdier and Y Zenou (2020), ‘DP14997 Education Transmission and Network Formation‘, CEPR Discussion Paper No. 14997. CEPR Press, Paris & London. https://cepr.org/publications/dp14997