Family Ties and Labor Markets in the United States and Brazil

The authors use comparable surveys from Brazil and the United States to examine "vertical" and "horizontal" connections between families. Motivated by a model of assortative mating and intergenerational transmission of schooling and earnings, they include the schooling of relatives in male wage equations. The authors find that the effect of father-in-law's schooling is larger than the effect of father's schooling in Brazil, while the opposite is observed in the United States. They interpret these effects as indicators of unobservable worker characteristics, with differences in assortative mating and female labor market activity explaining the differences in the apparent effect of fathers and fathers-in-law in the two countries.