Intergenerational mobility in earnings in Brazil spanning three generations and optimal investment in electricity generation in Texas

This dissertation contains three essays. The first and second essays examineintergenerational mobility in earnings in Brazil using a data set spanning three generations. I use data from PNAD{a nationally representative household survey inBrazil. I build a three-generations data set consisting of 5,125 grandfather-father-son triplets by restricting the sample to households with adult sons. The first essayestimates some relationships between a child's earnings and family background implied by the Becker-Tomes model. I find that the estimates contradict some of itspredictions, like the negative relationship between child's earnings and grandparent'searnings when controlling for parent's earnings. I propose a modified version of theBecker-Tomes model and find that the estimates are consistent with its predictions. Ifind that family background explains 34.9% of the variation in earnings among youngmales who live with their parents. If it were possible to eliminate the differences ininvestment in the children's human capital, the variation in earnings would fall byno more than 21.1%. Additionally, if there were no differences in endowments amongchildren, the variation in earnings would fall by no less than 26%. The second essayexamines the evolution of the intergenerational elasticity across generations and im-plications of marriage, education and fertility on mobility. I find that the estimateof the intergenerational elasticity in earnings is 0.847. The elasticity of earnings between son-in-law and father-in-law, 0.89, is approximately the same as the elasticitybetween son and father, 0.9. Additionally, controlling for fathers' percentile in theearnings distribution, each additional sibling decreases the sons' percentile by 1.77percentiles. The third essay estimates an indicator of the optimal investment in electricity generation in Texas, and the associated efficiency gains. The essay presents amethod to estimate the optimal investment in each technology available to generateelectricity. The estimation considers the expected entry and exit of generation plants,future fuel prices, different demand elasticities and a potential carbon allowance mar-kets. Considering a carbon allowance price equal to two times the level in Europe,the optimal investment in electricity generation in Texas is zero.