Research

“No Kid Is an Island: Intergenerational Mobility, Sorting and Peer Effects.”

This paper investigates the influence of exposure to schoolmates from diffrent family backgrounds on children’s intergenerational mobility. Using administrative data on Danish students born between 1980 and 1988, I find that that a one standard deviation increase in average schoolmates’ parental earnings results in a 2.89% increase in lifetime earnings for low SES children. Moreover, I find the relation of the effect with parental background to be U-shaped, with children from average parental background being unaffected and those from high-SES families experiencing similiar effects as those from low-SES families. When educational attainment and labor market participation are considered, I find that children exposed to better peers increase their educational achievements and their chances to be employed in high paying occupations and to cover managerial positions. Further, I decompose the portion of the effect due to spillovers in human capital formation from peer effects and parental influences on the labor market. I find that spillovers in human capital formation are offset by increased competition from higher human capital schoolmates, while netowork advantages inherited from former schoolmates explain most of the effect. Overall, these results provide evidence on the joint nature of social mobility: children climb the earnings’ ladder with respect of their parents, and in doing so, their peers play a crucial role.

“Born to be (sub)Prime: An Exploratory Analysis.”
(Joint with Helena Bach, Giacomo De Giorgi, Jaromir Nosal and Davide Pietrobon.) the AEA Papers and Proceedings, 2023, 113: 166-71.

We study how inheriting parents’ credit histories affects credit scores and access to credit of young individuals entering the credit market, and their subsequent experiences in the credit market. First, having an inherited credit history significantly positively affects credit scores at entry. Second, initial credit scores are very persistent. Third, inherited credit histories only affect outcomes through the initial credit score distribution. Finally, initial credit scores have significant persistent effects on credit use and access, such as having a mortgage or credit card penetration and utilization rate. Our results point to the importance of initial conditions in credit markets and are consistent with mechanisms based on multiplicity of equilibria and self-fulfilling liquidity traps in which lack of access to credit due to low credit scores re-affirms the low credit score ranking of an individual.

“Values for Grandchildren: The Role of Grandparents in Intergenerational Transmission of Income.”
(Joint with Giacomo De Giorgi, Mauricio Prado and Battista Severgnini.)

We study the role of direct interactions between children and their grandparents in the process of human capital accumulation within the family. Using Danish administrative data, we document grandparental effects on children’s life-time incomes other than grandparents’ influence on parental human capital. These results call for broadening the scope of established models of intergenerational mobility and human capital accumulation within the family which consider only two generations. Finally, we propose mass-layoffs as a potential source of exogenous variation in retirement time to estimate the causal impact of grandparental interactions on their grandkids.