2018/4/1 ～ 2019/3/31
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This research proposal is intended to explore a new mechanism causing economic inequality, namely intergenerational preference transfer. Unlike existing studies, we propose a framework where the economic inequality (e.g. wealth or income inequality) and heterogeneity in individuals’ preference (e.g. rate of time preference/patience or preference for leisure) are endogenously determined as an equilibrium outcome. Recent studies show that family background affects various aspects of adults’ behaviors, including saving and working. In another word, how parents raise their children matters. We will examine both theoretical and quantitative aspects of this transmission mechanism using an overlapping generation model. Not only does the insight from the studies offer a deeper understanding of this potentially important mechanism, it can also have implications toward policies designed to reduce economic inequality and promote mobility.