Family Ties and Labor Markets in the United States and Brazil

Comparable surveys from Brazil and the United States are used to examine "vertical" and "horizontal" economic connections between families. Based on a model of assortative mating and intergenerational transmission of schooling and earnings, the authors estimate the effects of the schooling of a worker's father, father-in-law, and wife on the worker's wage. The effect of the father-in-law's schooling is larger than the effect of the father's schooling in Brazil, while the opposite is observed in the United States. The authors interpret these effects as indicators of unobservable worker characteristics, with differences in female labor market activity and assortative mating explaining the differences in the apparent effect of fathers and fathers-in-law in the two countries.