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.