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How Strongly is Child Schooling Associated with Household Income?

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Schooling is widely seen as critical for income generation in all types of economies. A growing concern among many has been the possibility of increasing inequality in part due to children from higher-income households obtaining more schooling and reaping greater gains from schooling than children from lower-income households. There are many empirical studies for various societies that tend to find significantly positive, but small associations between household income and schooling. But these studies generally have three major limitations for the purpose of characterizing the degree of association between household income and schooling-related investments: (1) use of income indicators that may be contaminated by relatively large measurement errors and endogeneity, (2) inclusion of other household, community and schooling variables that may represent part of the association with income in empirical estimates, and (3) use of limited indicators of schooling. This paper uses a rich new household survey-commune-school facility survey from Viet Nam to illustrate how important these limitations may be. The estimates suggest: (1) predicted income (expenditure) tends to yield estimates of much stronger associations than does current income or expenditures, (2) controlling for variables such as in most previous studies reduces the estimated associations with income substantially, and (3) including a wide range of schooling-related variables leads to more nuanced understanding of income-schooling associations, with some benefits for children from poorer households but a dominant tendency for school and private behaviors to favor significantly and in many cases substantially children from higher-income households.

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Paper provided by University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences in its series CARESS Working Papres with number 97-22.

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Handle: RePEc:wop:pennca:97-22

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Cited by:
  1. Castro-Leal, Florencia & Dayton, Julia & Demery, Lionel & Mehra, Kalpana, 1999. "Public Social Spending in Africa: Do the Poor Benefit?," World Bank Research Observer, World Bank Group, vol. 14(1), pages 49-72, February.
  2. Filmer, Deon & Pritchett, Lant, 1998. "The effect of household wealth on educational attainment : demographic and health survey evidence," Policy Research Working Paper Series 1980, The World Bank.
  3. Filmer, Deon & Pritchett, Lant, 1998. "Estimating wealth effects without expenditure data - or tears : with an application to educational enrollments in states of India," Policy Research Working Paper Series 1994, The World Bank.
  4. Edmonds, Eric V & Pavcnik, Nina & Topalova, Petia, 2008. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," CEPR Discussion Papers 6772, C.E.P.R. Discussion Papers.
  5. Schady, Norbert & Araujo, Maria Caridad, 2006. "Cash transfers, conditions, school enrollment, and child work : evidence from a randomized experiment in Ecuador," Policy Research Working Paper Series 3930, The World Bank.
  6. David Mayer Foulkes & María Fernanda López Olivo & Edson Serván Mori, 2008. "Habilidades cognitivas: transmisión intergeneracional por niveles socioeconómicos," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 23(1), pages 129-156.
  7. Ricardo Hausmann & Miguel Székely, 1999. "Inequality and the Family in Latin America," Research Department Publications 4158, Inter-American Development Bank, Research Department.
  8. Nazmul Chaudhury & Luc Christiaensen & Mohammad Niaz Asadullah, 2006. "Schools, Household, Risk, and Gender: Determinants of Child Schooling in Ethiopia," CSAE Working Paper Series 2006-06, Centre for the Study of African Economies, University of Oxford.
  9. Ricardo Hausmann & Miguel Székely, 1999. "La desigualdad en América Latina y el Caribe," Research Department Publications 4159, Inter-American Development Bank, Research Department.
  10. Nancy Birdsall & Jere R. Behrman & Miguel Székely, 1998. "Movilidad de la enseñanza intergeneracional y condiciones macro y políticas de enseñanza en América Latina," Research Department Publications 4145, Inter-American Development Bank, Research Department.
  11. Jere R. Behrman & Nancy Birdsall & Miguel Székely, 1998. "Intergenerational Schooling Mobility and Macro Conditions and Schooling Policies in Latin America," IDB Publications 6446, Inter-American Development Bank.
  12. Filmer, Deon, 2000. "The structure of social disparities in education : gender and wealth," Policy Research Working Paper Series 2268, The World Bank.

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