Torben M. Andersen

The role parents' education plays for the educational achievements of children is a source of unequal opportunities. Through this channel the number of educated affects the options of future cohorts, creating a social multiplier effect making improvements in education self-reinforcing. Policies to compensate for inequalities of opportunities—public education or transfers—have very different implications. Transfers not only reduce inequality on impact but also reduce social mobility, while public education—even if a perfect substitute to private education—works in the opposite direction. Social impediments to education are similar to a market imperfection, and publicly provided education may lead to a Pareto improvement. (JEL D3, I2, H2, H4).