The Influence of Family Socioeconomic Status on Employment and Earnings: Empirical Evidence from Tanzania

This study examines the influence of family background; specifically parental education, employment status, and household income on the labour market outcomes of children in Tanzania. Drawing on data from the school-to-work Transition Survey and employing Heckman selection models and Logit estimations, the analysis provides robust evidence on the intergenerational transmission of advantage. The results indicate that both parental education and household income significantly improve children’s educational attainment. Furthermore, parental education, as well as the interaction between parent and child education, are positively associated with children’s employment status. In relation to earnings, household income emerges as a key determinant: children from higher-income families exhibit significantly better earnings outcomes. Notably, the findings reveal distinct effects of parental employment by gender: fathers’ employment increases the likelihood of children being self-employed, whereas mothers’ employment is associated with a greater probability of formal sector employment among children. These results underscore the importance of policies that enhance women’s labour market participation as a means of fostering improved labour market outcomes for the next generation.