We explore a family investment model with multiple children. In this economy, there exists I family dynasties; denote by i = 1, 2, ..., I. In each family, there are now TWO children indexed by j = 1, 2. Each individual lives for just 2 periods: (i) childhood (c), and (ii) adulthood (a). The index t denotes the time of birth; i.e., denotes the “birth cohort” that each individual belongs to. In this model, children are born with initial “abilities”; i.e., a scalar summary measure of cognitive skills and personality traits (assume that such a measure exists), given by (?!,#,$,%,&). The human capital production function for each child depends on both private investments by parents as well as on the (observable) measure of that child’s abilities: