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Intergeneration Transfer of Human Capital: Results from a Natural Experiment in Taiwan

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  • Wehn-Jyuan Tsai
  • Jin-Tan Liu
  • Shin-Yi Chou
  • Michael Grossman

Abstract

We exploit a natural experiment to estimate the causal impact of parental education on educational outcomes of their children when they are high school seniors. In 1968, the Taiwanese government extended compulsory education from 6 to 9 years and opened over 150 new junior high schools at a differential rate among regions. We form treatment and control groups of women or men who were age 12 or under on the one hand and between the ages of 13 and 25 on the other hand in 1968. Within each region, we exploit variations across cohorts in new junior high school openings to construct an instrument for schooling. We employ this instrument to estimate the causal effects of mother’s and father’s schooling on their child’s college entrance examination test scores in the years 2000-2003, on the probability that the child attended college and on the rank of the college attended. The schooling of each parent does cause their child to experience better educational outcomes. A one-year increase in the schooling of either parent raises the probability that the child attends one of the top six colleges in Taiwan by approximately 10 percent.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16876.

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Date of creation: Mar 2011
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Handle: RePEc:nbr:nberwo:16876

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  1. Jere R. Behrman & Mark R. Rosenzweig, 2002. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation?," American Economic Review, American Economic Association, vol. 92(1), pages 323-334, March.
  2. Arnaud Chevalier, 2004. "Parental Education And Child's Education: A Natural Experiment," Royal Economic Society Annual Conference 2004 42, Royal Economic Society.
  3. Pedro Carneiro & Costas Meghir & Matthias Parey, 2007. "Maternal education, home environments and the development of children and adolescents," IFS Working Papers W07/15, Institute for Fiscal Studies.
  4. Björklund, Anders & Lindahl, Mikael & Plug, Erik, 2005. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," IZA Discussion Papers 1739, Institute for the Study of Labor (IZA).
  5. 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.
  6. Neumark, David, 1999. "Biases in twin estimates of the return to schooling," Economics of Education Review, Elsevier, vol. 18(2), pages 143-148, April.
  7. Damien de Walque, 2009. "Parental Education and Children's Schooling Outcomes: Evidence from Recomposed Families in Rwanda," Economic Development and Cultural Change, University of Chicago Press, vol. 57(4), pages 723-746, 07.
  8. Kate L. Antonovics & Arthur S. Goldberger, 2005. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation? Comment," American Economic Review, American Economic Association, vol. 95(5), pages 1738-1744, December.
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