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Family income and children's education: Using the Norwegian oil boom as a natural experiment

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  • Løken, Katrine V.

Abstract

Parental income is positively correlated with children's educational attainment. This paper addresses the causality of this observed link. We have a unique data set for Norwegians born in the period 1967-1969, with a measure of permanent family income in the children's adolescence. This enables us to examine the long-term effect of family income on children's educational attainment. The Norwegian oil shock in the 1970s is used as an instrument, because this - in some regions but not in others - implied a general increase in income unrelated to parents' abilities. This variation in income is used to estimate the causal effect of family income on children's educational attainment. We find no such causal relationship. This result is robust with respect to different specification tests.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:labeco:v:17:y:2010:i:1:p:118-129
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    More about this item

    Keywords

    Mobility Instrumental variables Income and education;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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