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|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (514) 985-4000
Fax: (514) 985-4039
Web page: http://www.cirano.qc.ca/
More information through EDIRC
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.:
- Edward P. Lazear, 1980.
"Family Background and Optimal Schooling Decision,"
NBER Working Papers
0141, National Bureau of Economic Research, Inc.
- 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.
- 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.
- Christian Belzil & J�rgen Hansen, 2002.
"Unobserved Ability and the Return to Schooling,"
Econometric Society, vol. 70(5), pages 2075-2091, September.
- Michael P. Keane & Kenneth I. Wolpin, 1995.
"The career decisions of young men,"
559, Federal Reserve Bank of Minneapolis.
- 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.
- 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.
- 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.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
When requesting a correction, please mention this item's handle: RePEc:cir:cirwor:2001s-20. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster)
If references are entirely missing, you can add them using this form.