This paper analyzes the effects of income differentials in fertility on Lorenz curves and standard inequality measures. The role of intergenerational mobility is examined and incorporated into counterfactual simulations based on Brazilian data. Two standard inequality measures move in opposite directions in both the steady state and the transition in response to the elimination of fertility differentials. The counterfactuals confirm the theoretical predictions of misleading intertemporal inequality comparisons in the presence of differential fertility.

We investigate whether omitted family background variables are responsible for high returns to schooling estimated in Brazil. Returns to schooling fall by about one-third when parental schooling is added to wage equations. Surprisingly, the schooling of fathers-in-law has larger effects on wages than the schooling of fathers. On the basis of a model of assortative mating, we interpret this as evidence that parental characteristics represent unobservable worker attributes rather than nepotism in the labor market. We conclude that the "family background bias" in returns to schooling is modest and need not imply returns to family connections.

This paper analyzes the effects of income differentials in fertility on Lorenz curves and standard inequality measures. The role of intergenerational mobility is examined and incorporated into counterfactual simulations based on Brazilian data. Two standard inequality measures move in opposite directions in both the steady state and the transition in response to the elimination of fertility differentials. The counterfactuals confirm the theoretical predictions of misleading intertemporal inequality comparisons in the presence of differential fertility. Copyright 1986 by American Economic Association.

We investigate whether omitted family background variables are responsible for high returns to schooling estimated in Brazil. Returns to schooling fall by about one-third when parental schooling is added to wage equations. Surprisingly, the schooling of fathers-in-law has larger effects on wages than the schooling of fathers. On the basis of a model of assortative mating, we interpret this as evidence that parental characteristics represent unobservable worker attributes rather than nepotism in the labor market. We conclude that the "family background bias" in returns to schooling is modest and need not imply returns to family connections.