Human capital investments, marriage market and the intergenerational transmission of economic advantage in India

Thangamuthu Lakshmanasamy, University of Madras

This paper estimates the intergenerational transmission of socioeconomic advantage in India using a primary data. Under assortative marriage, potential partners are matched by their human capital and earnings potential. Hence parental investments in the human capital of children are in part motivated by the prospects of attracting a better partner for their children. This strengthens the intergenerational transmission of advantages and reduces intergenerational mobility. The OLS estimates of the intergenerational transmission model of education and income between parents and children, and between parents-in-law and sons/daughters-in-law show quite substantial transmission than mobility and are more pronounced for daughters. The elasticity of children’s income/education is strongly positive with respect to parents and in-laws income/education. Spousal earnings is just as elastic as the children’s own earnings with respect to the parents and in-laws education and income. Under assortative marriage and intergenerational transmission of advantage the inequalities in intergenerational income and opportunities is perpetuated.