"This paper develops a model of the transmission of earnings, assets, and consumption from parents to descendants. The model assumes utility-maximizing parents who are concerned about the welfare of their children. The degree of intergenerational mobility is determined by the interaction of this utility-maximizing behavior with investment and consumption opportunities in different generations and with different kinds of luck. We examine a number of empirical studies for different countries. Regression to the mean in earnings in rich countries appears to be rapid. Almost all the earnings advantages or disadvantages of ancestors are wiped out in three generations." A comment by Robert J. Willis is included (pp. 40-7).

The paper attempts to integrate new approaches to estimating union wage effects with the analysis of public-private sector wage differentials. Estimates of the union differential in both public and private sectors, allowing for the endogeneity of union status, are presented. The hypothesis that the recently measured rents to public sector employment primarily reflect the recent increase in unionization in that sector is examined, and receives considerable empirical support. There was evidence of positive selection into the union sector, especially for private sector workers. Union status appears to be strongly influenced by the expected wage gain from joining the union sector.