Estimating the Intergenerational Education Correlation from a Dynamic Programming Model
Using a structural dynamic programming model, we investigate the relative importance of initial household human capital endowments and unobserved individual abilities in explaining cross-sectional differences in schooling attainments and wages. We evaluate the true intergenerational education correlation and the effect of an exogenous increase in human capital of the current generation on schooling attainments of the next generation. We find that the variation in schooling attainments explained by differences in household human capital is twice as large as the variation explained by unobserved abilities. However, the variation in labor market wages explained by differences in unobserved abilities is 3 times larger than the variation explained by household human capital endowments. We also find that the true partial correlations between son and father's schooling and between son and mother's education are respectively 17% and 40% lower than the sample correlations. Increasing the level of schooling of the current generation by one year raises schooling attainments of the next generation by 0.4 year. ¸ l'aide d'un modèle de programmation dynamique, nous analysons l'importance relative des antécédents familiaux et de l'habilité non-observée dans la détermination du niveau de scolarité et des salaires. Nous évaluons aussi la corrélation intergénérationelle au niveau de l'éducation et déterminons l'effet d'une augmentation exogène du niveau de scolarité de la génération présente sur le niveau d'éducation de la génération future.
|Date of creation:||01 Mar 2001|
|Contact details of provider:|| Postal: 1130 rue Sherbrooke Ouest, suite 1400, Montréal, Quéc, H3A 2M8|
Phone: (514) 985-4000
Fax: (514) 985-4039
Web page: http://www.cirano.qc.ca/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
- Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
- Christian Belzil & Jörgen Hansen, 2002.
"Unobserved Ability and the Return to Schooling,"
Econometric Society, vol. 70(5), pages 2075-2091, September.
- Christian Belzil, 2002. "Unobserved Ability and the Return to schooling++," Post-Print hal-00541872, HAL.
- Belzil, Christian & Hansen, Jörgen, 2002. "Unobserved Ability and the Return to Schooling," IZA Discussion Papers 508, Institute for the Study of Labor (IZA).
- Christian Belzil & Jörgen Hansen, 2002. "Unobserved Ability and the Return to Schooling," CIRANO Working Papers 2002s-19, CIRANO.
- Lazear, Edward P, 1980. "Family Background and Optimal Schooling Decisions," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 42-51, February.
- Edward P. Lazear, 1980. "Family Background and Optimal Schooling Decision," NBER Working Papers 0141, National Bureau of Economic Research, Inc.
- Topel, Robert, 1999. "Labor markets and economic growth," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 44, pages 2943-2984 Elsevier.
- Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
- Michael P. Keane & Kenneth I. Wolpin, 1995. "The career decisions of young men," Working Papers 559, Federal Reserve Bank of Minneapolis.
- Thierry Magnac & David Thesmar, 1999. "Identifying Dynamic Discrete Choice Models : An Application to School-Leaving in France," Working Papers 99-16, Centre de Recherche en Economie et Statistique.
- Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, vol. 67(6), pages 1295-1340, November.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. Full references (including those not matched with items on IDEAS)