Galton vs. the Human Capital Approach to Inheritance: Some Evidence
The field of biology offers a simple but serious competitor to Gary Becker's theory of the intergenerational transmission of inequality. Many economists have utilized Gary's model to analyze important empirical and policy questions but none have shown that the economic approach dominates Galton's approach from a positive point of view. I derive ten implications of the human capital approach which are distinct from Galton's and provide evidence on nine of them. The evidence includes my own analysis of the PSID, SCF, and NLSY micro data sets as well as references to results reported in previous literatures. Five of the uniquely economic implications appear to be refuted. Three implications are verified - although one is rather trivial - while mixed results are obtained for a ninth implication.
I suggest that some of the extensions of economic analysis that have recently been developed by Gary Becker and others will, when applied to the intergenerational transmission of inequality, improve the predictions of the economic approach.
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Hard copies of an earlier version of the paper are being circulated as Population Research Center Discussion Paper Series #95-14, November 1995.
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© copyright 1996 by Casey B. Mulligan.