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Author: Loxton, Abigail Marie
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1. Loxton, Abigail Marie
Essays on Inter Vivos Transfers and Choice of College Major
Ph.D. Dissertation, Department of Economics, Indiana University, 2020
Cohort(s): NLSY97
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): College Major/Field of Study/Courses; Earnings; Income Risk; Intergenerational Patterns/Transmission; Occupational Choice; Parental Influences

Permission to reprint the abstract has not been received from the publisher.

My dissertation analyzes inter vivos transfers from parents to children, the heterogeneity of pecuniary and nonpecuniary benefits across different fields of study, and how these factors jointly contribute to the choice of field in college.

In my second chapter, I find evidence that parents affect their children's career choice through inter vivos transfers. Embedding an occupational choice model into an overlapping generations framework with altruism, I show children with wealthy parents favor jobs that have riskier income streams relative to their expected earnings because high-income parents can insure their children against negative earnings shocks. Using the 1997 cohort from the National Longitudinal Study of Youth, I rank major fields of study according to two measures of earnings uncertainty. I then use a multinomial logit to show that children, particularly men, of higher income parents select into fields with higher earnings uncertainty. This effect persists even for the subsample of first-generation college students. The empirical results suggest that child decisions are consistent with the theory that inter vivos transfers act as an insurance mechanism for college children.

Bibliography Citation
Loxton, Abigail Marie. Essays on Inter Vivos Transfers and Choice of College Major. Ph.D. Dissertation, Department of Economics, Indiana University, 2020.