Human Capital, Inequality and Intergenerational Links

This paper studies the intergenerational effects on human capital accumulation and inequality. I build a general equilibrium model with heterogeneous agents and intergenerational links. The results show that the bequeathed initial wealth, rather than the ability of acquiring human capital, is dominant in determining lifetime earning and wealth. I also find the depreciation rate of human capital and the ability of acquiring human capital have impacts on the distribution of earning and wealth. The results also stress the importance of parental altruism in mitigating wealth concentration and poverty