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Does Money Buy Higher Schooling?: Evidence from Secondary School Track Choice in Germany

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Author Info
Marcus Tamm

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Abstract

The German schooling system selects children into different secondary school tracks already at a very early stage in life. School track choice heavily influences choices and opportunities later in life. It has often been observed that secondary schooling achievements display a strong correlation with parental income. We use sibling fixed effects models and information on a natural experiment in order to analyze whether this correlation is due to a causal effect of income or due to unobservable factors that themselves might be correlated across generations. Our main findings suggest that income has no positive causal effect on school choice and that differences between high- and low-income households are driven by unobserved heterogeneity, e.g. differences in motivation or preferences.

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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers with number 41.

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Length: 19 p.
Date of creation: 2007
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Publication status: Published in: Economics of Education Review 27 (2008) 5, 536-545
Handle: RePEc:diw:diwsop:diw_sp41

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Related research
Keywords: Child poverty; educational attainment; secondary schools; sibling differences; natural experiment;

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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  1. Flavio Cunha & James J. Heckman & Lance Lochner & Dimitriy V. Masterov, 2005. "Interpreting the Evidence on Life Cycle Skill Formation," NBER Working Papers 11331, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Becker, Gary S & Tomes, Nigel, 1986. "Human Capital and the Rise and Fall of Families," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S1-39, July. [Downloadable!] (restricted)
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  3. Thomas Bauer & Ira Gang, 2001. "Sibling Rivalry in Educational Attainment: The German Case," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 15(2), pages 237-255, 06. [Downloadable!] (restricted)
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  4. Christian Dustmann, 2004. "Parental background, secondary school track choice, and wages," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 209-230, April. [Downloadable!] (restricted)
  5. Miles Corak & Michael Fertig & Marcus Tamm, 2005. "A portrait of child poverty in Germany," Innocenti Working Papers inwopa05/29, UNICEF Innocenti Research Centre. [Downloadable!]
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  6. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December. [Downloadable!] (restricted)
  7. Marco Francesconi & Stephen P. Jenkins & Thomas Siedler, 2006. "Childhood Family Structure and Schooling Outcomes: Evidence for Germany," Discussion Papers of DIW Berlin 610, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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  8. Richard Williams, 2006. "Generalized ordered logit/partial proportional odds models for ordinal dependent variables," Stata Journal, StataCorp LP, vol. 6(1), pages 58-82, March. [Downloadable!]
  9. Jenkins, Stephen P. & Schluter, Christian, 2002. "The Effect of Family Income During Childhood on Later-Life Attainment: Evidence from Germany," IZA Discussion Papers 604, Institute for the Study of Labor (IZA). [Downloadable!]
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  10. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-89, December. [Downloadable!] (restricted)
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  1. repec:ese:iserwp: is not listed on IDEAS
  2. Hörisch, Hannah, 2008. "Does parental employment affect children's educational attainment?," Discussion Papers in Economics 2140, University of Munich, Department of Economics. [Downloadable!]
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