On the one hand, the impact of the returns to education on the degree of
intergenerational mobility can be interpreted as reflecting an important role for
the transmission of innate ability between parents and children. If endowments
of this sort are strongly inherited, then their impact on earnings is heightened if
returns to schooling are higher: when returns are higher, mobility is as a result
lower. But this interpretation also has to account for nonlinear patterns both in
the returns to schooling, and the transmission of incomes across the generations.
Non-linearities would seem to imply that top earners are either particularly
talented and have, in some sense, more of the characteristics valuable in the
labor market to pass on to their children, or that these characteristics are more
strongly transmitted between top earning parents and their children than in
middle or lower income families.