An Intergenerational Model of Wages, Hours, and Earnings

We develop a model in which a set of unobserved parental and sibling factors drives wages and work preferences. These factors lead to similarities within families in wages, work hours, and earnings. We estimate the model using data on parents and siblings in the National Longitudinal Surveys. We find that parental and sibling wage factors influence the wages of both sons and daughters. We also find strong similarities in work hours that run along gender lines and are due primarily to linkages in preferences. The effect of wages on earnings is direct rather than through a labor supply response.