Work attitudes and intergenerational mobility

The phenomenon of systemic changes in the fortunes of social groups is hard to reconcile with traditional macroeconomic models of intergenerational income mobility. This paper, therefore, proposes a theory of intergenerational mobility whereby instilling strict work attitudes is an instrument to address moral hazard in poor families more so than in rich families, which is consistent with empirical regularities pertaining to work attitudes. The mechanism implies that hard-working children of the poor converge to and may eventually overtake leisure-prone children of the rich.