The Effect of Family Background on Student Effort

Students from more advantageous family backgrounds tend to perform better than those from less advantageous backgrounds. But it is not clear that these students exert more effort. We build a model of students, schools, and employers to study the interaction of family background and effort exerted by the student in the education process. Two factors turn out to be key in determining the relationship between effort and family background: (i) the student’s attitude toward risk and (ii) how the student’s marginal productivity of effort depends on her family background. We show that when the degree of risk aversion is relatively low (high) compared to the sensitivity of the marginal productivity of effort, students from more advantageous family backgrounds exert more (less) effort. Empirically, we find that if parental education was reduced from holding a university degree to incomplete compulsory education, primary and secondary school students would exert around 21–23% less effort (approximately equal to a reduction of 2 hours weekly in homework). For primary school students we also find that marginal productivities of effort are higher for those from less advantageous family backgrounds.