Association for Public Policy Analysis & Management

Scholars have long observed that investment in education is a major channel of intergenerational mobility. Using a new linked sample of the 1940 U.S. census and Wisconsin Longitudinal Study (WLS) first conducted in the late 1950s, this paper focuses on a historical period when the wage structure changed and the degree of economic inequality decreased. I find evidence that parents' wage differentials were positively correlated with children's educational attainment. This could further relate to the empirical finding that the degree of educational inequality also decreased during this time period.