Education, Segregation and Marital Sorting: Theory and an Application to UK Data

38 Pages Posted: 22 Jul 2001 Last revised: 25 Sep 2001

See all articles by Raquel Fernández

Raquel Fernández

New York University - Leonard N. Stern School of Business, Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: July 2001

Abstract

This paper presents a model of the intergenerational transmission of education and marital sorting where parents matter both because of their household income and because parental human capital determines the expected value of a child's disutility from making an effort to become skilled. We show that an increase in segregation has potentially ambiguous effects on the fraction of individuals that become skilled in the steady state, and hence on marital sorting, the personal and household income distribution, and welfare. We calibrate the steady-state of our model to UK statistics and compare a version of the model to the results obtained previously for the US. We find that segregation is likely to have a smaller negative impact in the UK than in the US as a result of the fertility and education transmission process. When the relative supply of skilled individuals is endogenous, the welfare effect of increased sorting on unskilled individuals depends on the magnitude of the supply increase.

Suggested Citation

Fernández, Raquel, Education, Segregation and Marital Sorting: Theory and an Application to UK Data (July 2001). NBER Working Paper No. w8377. Available at SSRN: https://ssrn.com/abstract=277406

Raquel Fernández (Contact Author)

New York University - Leonard N. Stern School of Business, Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

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