Does Education Expansion Increase Intergenerational Mobility?

Education expansion may lead to ‘over‐education’, where the social connections of parents may exert more significant influence on the return to education of children. With the assumption of a positive correlation between return on human capital and parental income in the presence of over‐education, we show that: (i) the expansion of education may cause horizontal inequity in education opportunities and inefficiency in human capital accumulation; (ii) the positive correlation between return on human capital and parental income causes a more persistent intergenerational immobility; (iii) an expansion of education (especially higher education) leads to more persistent intergenerational immobility.