Advanced Search
MyIDEAS: Login to save this paper or follow this series

The impact of parental income and education on the schooling of their children

Contents:

Author Info

  • Arnaud Chevalier
  • Colm Harmon
  • Vincent O'Sullivan
  • Ian Walker

    ()
    (Institute for Fiscal Studies and Lancaster University)

Abstract

This paper addresses the intergeneration transmission of education and investigates the extent to which early school leaving (at age 16) may be due to variations in permanent income, parental education levels, and shocks to income at this age. Least squares estimation reveals conventional results - stronger effects of maternal education than paternal, and stronger effects on sons than daughters. We find that the education effects remain significant even when household income is included. Moreover, decomposing the income when the child is 16 between a permanent component and shocks to income at age 16 only the latter is significant. It would appear that education is an important input even when we control for permanent income but that credit constraints at age 16 are also influential. However, when we use instrumental variable methods to simultaneously account for the endogeneity of parental education and paternal income, we find that the strong effects of parental education become insignificant and permanent income matters much more, while the effects of shocks to household income at 16 remain important. A similar pattern of results are reflected in the main measure of scholastic achievement at age 16. These findings have important implications for the design of policies aimed at encouraging pupils to remain in school longer.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.ifs.org.uk/wps/wp0505.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W05/05.

as in new window
Length:
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:ifs:ifsewp:05/05

Contact details of provider:
Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Email:
Web page: http://www.ifs.org.uk
More information through EDIRC

Order Information:
Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
Email:

Related research

Keywords: Early school leaving; intergenerational transmission;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Sandra E Black & Paul J Devereux, 2010. "Recent Developments in Intergenerational Mobility," Working Papers 201010, School Of Economics, University College Dublin.
  2. Carneiro, Pedro & Meghir, Costas & Parey, Matthias, 2007. "Maternal Education, Home Environments and the Development of Children and Adolescents," CEPR Discussion Papers 6505, C.E.P.R. Discussion Papers.
  3. Philip Oreopoulos & Marianne E. Page, 2006. "The Intergenerational Effects of Compulsory Schooling," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 729-760, October.
  4. Heckman, James J. & Masterov, Dimitriy V., 2004. "Skill Policies for Scotland," IZA Discussion Papers 1444, Institute for the Study of Labor (IZA).
  5. Løken, Katrine V., 2010. "Family income and children's education: Using the Norwegian oil boom as a natural experiment," Labour Economics, Elsevier, vol. 17(1), pages 118-129, January.
  6. Björklund, Anders & Lindahl, Mikael & Plug, Erik, 2004. "Intergenerational Effects in Sweden: What Can We Learn from Adoption Data?," IZA Discussion Papers 1194, Institute for the Study of Labor (IZA).
  7. Maurin, Eric & McNally, Sandra, 2005. "Vive la Révolution! Long Term Returns of 1968 to the Angry Students," CEPR Discussion Papers 4940, C.E.P.R. Discussion Papers.
  8. Jo Blanden & Paul Gregg, 2004. "Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain," CEE Discussion Papers 0041, Centre for the Economics of Education, LSE.
  9. Freeman, Richard B, 1994. "H. G. Lewis and the Study of Union Wage Effects," Journal of Labor Economics, University of Chicago Press, vol. 12(1), pages 143-49, January.
  10. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
  11. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2003. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," NBER Working Papers 10066, National Bureau of Economic Research, Inc.
  12. Philip Oreopoulos & Marianne E. Page & Ann Huff Stevens, 2003. "Does Human Capital Transfer from Parent to Child? The Intergenerational Effects of Compulsory Schooling," NBER Working Papers 10164, National Bureau of Economic Research, Inc.
  13. Harmon, C & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
  14. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2003. "Does education raise productivity, or just reflect it?," Working Papers 200304, School Of Economics, University College Dublin.
  15. Holmlund, Helena & Lindahl, Mikael & Plug, Erik, 2008. "The Causal Effect of Parent's Schooling on Children's Schooling: A Comparison of Estimation Methods," IZA Discussion Papers 3630, Institute for the Study of Labor (IZA).
  16. Casey B. Mulligan, 1999. "Galton versus the Human Capital Approach to Inheritance," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S184-S224, December.
  17. Haroon Chowdry & Claire Crawford & Lorraine Dearden & Alissa Goodman & Anna Vignoles, 2010. "Widening participation in higher education: analysis using linked administrative data," IFS Working Papers W10/04, Institute for Fiscal Studies.
  18. Chevalier, Arnaud, 2004. "Parental Education and Child's Education: A Natural Experiment," IZA Discussion Papers 1153, Institute for the Study of Labor (IZA).
  19. Dickson, Matt & Gregg, Paul & Robinson, Harriet, 2013. "Early, Late or Never? When Does Parental Education Impact Child Outcomes?," IZA Discussion Papers 7123, Institute for the Study of Labor (IZA).
  20. Lorraine Dearden & Carl Emmerson & Costas Meghir, 2009. "Conditional Cash Transfers and School Dropout Rates," Journal of Human Resources, University of Wisconsin Press, vol. 44(4).
  21. Anders Björklund & Mikael Lindahl & Erik Plug, 2006. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," The Quarterly Journal of Economics, MIT Press, vol. 121(3), pages 999-1028, 08.
  22. Black, Sandra & Devereux, Paul J. & Salvanes, Kjell G, 2003. "Why the Apple Doesn't Fall: Understanding Intergenerational Transmission of Human Capital," CEPR Discussion Papers 4150, C.E.P.R. Discussion Papers.
  23. Erik Plug, 2004. "Estimating the Effect of Mother's Schooling on Children's Schooling Using a Sample of Adoptees," American Economic Review, American Economic Association, vol. 94(1), pages 358-368, March.
  24. Lorraine Dearden & Stephen Machin & H Reed, 1996. "Intergenerational Mobility in Britain," CEP Discussion Papers dp0281, Centre for Economic Performance, LSE.
  25. Eric Maurin & Sandra McNally, 2008. "Vive la Révolution! Long-Term Educational Returns of 1968 to the Angry Students," Journal of Labor Economics, University of Chicago Press, vol. 26, pages 1-33.
  26. Bruce Sacerdote, 2004. "What Happens When We Randomly Assign Children to Families?," NBER Working Papers 10894, National Bureau of Economic Research, Inc.
  27. Almond, Douglas & Currie, Janet, 2011. "Human Capital Development before Age Five," Handbook of Labor Economics, Elsevier.
  28. Daron Acemoglu & Jorn-Steffen Pischke, 2000. "Changes in the Wage Structure, Family Income, and Children's Education," NBER Working Papers 7986, National Bureau of Economic Research, Inc.
  29. Stephen P. Jenkins & Christian Schluter, 2002. "The Effect of Family Income during Childhood on Later-life Attainment: Evidence from Germany," Discussion Papers of DIW Berlin 317, DIW Berlin, German Institute for Economic Research.
  30. Lundborg, Petter & Nordin, Martin & Rooth, Dan-Olof, 2011. "The Intergenerational Transmission of Human Capital: Exploring the Role of Skills and Health Using Data on Adoptees and Twins," IZA Discussion Papers 6099, Institute for the Study of Labor (IZA).
  31. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-86, December.
  32. Arnaud Chevalier & Gauthier Lanot, 2002. "The Relative Effect of Family Characteristics and Financial Situation on Educational Achievement," Education Economics, Taylor & Francis Journals, vol. 10(2), pages 165-181.
  33. Paul Gregg & Susan Harkness & Stephen Machin, 1999. "Poor kids: trends in child poverty in Britain, 1968-96," Fiscal Studies, Institute for Fiscal Studies, vol. 20(2), pages 163-187, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:05/05. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephanie Seavers).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.