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The causal effects of parents' marital status on children's earnings

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  • Bob Wen

    (Clemson University)

Abstract

In this research, I examine how the marital relationship affects children's future economic status. I introduce the parental marital status hypothesis of children's earnings: 1. Stronger family bonds and marriage relationship have positive effects on children's earnings skills and economic status. 2. The influence goes through the channels of the investments in children's education and the intergenerational endowment inheritability. 3. Successful marriage leads to intergenerational relative earnings improvement. I use PSID data to connect parents and their children. Two-stage-least-squares estimations help to alleviate the endogeneity problem of the explanatory variable of interest, parent's marital status. Preliminary results show the following: 1. The direct effects of parents' marital status on children's earnings reflect the factors that are related to the unobservable family endowment inheritance. 2. The education premium is affected by parents' marital status. Earnings returns to schooling are higher for workers who grew up in families with married parents than in families with parents who experienced divorce or were ever single. 3. Marriage has more positive effects on sons' earnings than on daughters'.

Suggested Citation

  • Bob Wen, 2020. "The causal effects of parents' marital status on children's earnings," 2020 Stata Conference 26, Stata Users Group.
    • Handle: RePEc:boc:scon20:26
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    File URL: http://fmwww.bc.edu/repec/scon2020/us20_Wen.pdf
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