Human Capital and Intergenerational Mobility in U.S. Counties

With inequality returning to historically high levels, intergenerational mobility has attracted growing attention from policy makers and academics. The authors use recently published county-level data to study the determinants of intergenerational mobility, measured by income levels and teen birth rates. Following Solon’s mobility model, the authors study the impacts of public investment in human capital, returns to human capital, and taxation. The results show that better school quality and higher returns to education increase adult incomes and reduce teen birth rates for children from low-income families. By comparing counties within or adjacent to metropolitan areas to other counties, the authors find that urban upward mobility is sensitive to parents’ education, while nonurban upward mobility is sensitive to migration opportunities.