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Ability, Parental Valuation of Education, and the High School Dropout Decision

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  • Kelly Foley
  • Giovanni Gallipoli
  • David A. Green

Abstract

The probability of dropping out of high school varies considerably with parental education. Using a rich Canadian panel data set, we examine the channels determining this socioeconomic status effect. We estimate an extended version of Carneiro, Hansen and Heckman (2003)’s factor model, incorporating effects from cognitive and noncognitive ability and parental valuation of education (PVE). We find that cognitive ability and PVE have substantial impacts on dropping out and that parental education has little direct effect on dropping out after controlling for these factors. Our results confirm the importance of determinants of ability by age 15 but also indicate an important role for PVE during teenage years.

Suggested Citation

  • Kelly Foley & Giovanni Gallipoli & David A. Green, 2014. "Ability, Parental Valuation of Education, and the High School Dropout Decision," Journal of Human Resources, University of Wisconsin Press, vol. 49(4), pages 906-944.
  • Handle: RePEc:uwp:jhriss:v:49:y:2014:i:4:p:906-944
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    Cited by:

    1. Michael J. Kottelenberg & Steven F. Lehrer, 2019. "How Skills and Parental Valuation of Education Influence Human Capital Acquisition and Early Labor Market Return to Human Capital in Canada," Journal of Labor Economics, University of Chicago Press, vol. 37(S2), pages 735-778.
    2. Falch, Torberg & Lujala, Päivi & Strøm, Bjarne, 2013. "Geographical constraints and educational attainment," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 164-176.
    3. Louis N. Christofides & Michael Hoy & Joniada Milla & Thanasis Stengos, 2012. "The Implication of Peer and Parental Influences on University Attendance: A Gender Comparison," Working Papers 1201, University of Guelph, Department of Economics and Finance.
    4. Hou, Feng & Picot, Garnett, 2013. "Why Immigrant Background Matters for University Participation: A Comparison of Switzerland and Canada," CLSSRN working papers clsrn_admin-2013-50, Vancouver School of Economics, revised 22 Nov 2013.
    5. Johannes S. Kunz & Kevin E. Staub, 2016. "Subjective completion beliefs and the demand for post-secondary education," Economics of Education Working Paper Series 0120, University of Zurich, Department of Business Administration (IBW).
    6. Falch, Torberg & Strøm, Bjarne, 2013. "Schools, ability, and the socioeconomic gradient in education choices," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 43(C), pages 49-59.
    7. Kunz, Johannes S. & Staub, Kevin E., 2020. "Early subjective completion beliefs and the demand for post-secondary education," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 34-55.
    8. Foley, Kelly, 2017. "The gender gap in university participation: What role do skills and parents play?," CLEF Working Paper Series 8, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    9. Bertoni, Eleonora & Di Maio, Michele & Molini, Vasco & Nisticò, Roberto, 2019. "Education is forbidden: The effect of the Boko Haram conflict on education in North-East Nigeria," Journal of Development Economics, Elsevier, vol. 141(C).
    10. Christofides, Louis N. & Hoy, Michael & Milla, Joniada & Stengos, Thanasis, 2012. "Grades, Aspirations and Post-Secondary Education Outcomes," IZA Discussion Papers 6867, Institute of Labor Economics (IZA).
    11. Kelly Foley, 2019. "The gender gap in university enrolment: Do parents play a role beyond investing in skills?," Canadian Journal of Economics, Canadian Economics Association, vol. 52(2), pages 441-489, May.
    12. Orazio Attanasio & Lina Cardona-Sosa & Carlos Medina & Costas Meghir & Christian Posso, 2021. "Long Term Effects of Cash Transfer Programs in Colombia," Borradores de Economia 1170, Banco de la Republica de Colombia.
    13. Nicholas Trachter, 2015. "Stepping stone and option value in a model of postsecondary education," Quantitative Economics, Econometric Society, vol. 6(1), pages 223-256, March.
    14. Donna Feir, 2015. "The Intergenerational Effect of Forcible Assimilation Policy on Education," Department Discussion Papers 1501, Department of Economics, University of Victoria.
    15. Coelli, Michael & Green, David A., 2012. "Leadership effects: school principals and student outcomes," Economics of Education Review, Elsevier, vol. 31(1), pages 92-109.
    16. Green, David & Kesselman, Jonathan Rhys & Tedds, Lindsay M., 2021. "Covering All the Basics: Reforms for a More Just Society," MPRA Paper 105902, University Library of Munich, Germany.
    17. Garnett Picot & Feng Hou, 2013. "Why Immigrant Background Matters for University Participation: A Comparison of Switzerland and Canada," International Migration Review, Wiley Blackwell, vol. 47(3), pages 612-642, September.

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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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