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

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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 from 1968-1973, with a measure of permanent family income from the children are 0-20 years old. This enables us to look at the long term e¤ect of family income on children's educational attainment. The Norwegian oil shock in the 1970s and 1980s is used as an instrument, since this - in some regions, but not in others - implied a general increase in income that was unrelated to education. This variation in income is used to estimate the causal e¤ect of family income on children's educational attainment. We find no causal relationship between family in- come and children's educational attainment. This result is robust to different specification tests.

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File URL: http://www.uib.no/filearchive/No.%2003-07.pdf
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Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 03/07.

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Length: 32 pages
Date of creation: 24 Jan 2007
Handle: RePEc:hhs:bergec:2007_003
Contact details of provider: Postal:
Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway

Phone: (+47)55589200
Fax: (+47)55589210
Web page: http://www.uib.no/econ/en
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  7. Dan A. Black & Terra G. McKinnish & Seth G. Sanders, 2005. "Tight Labor Markets and the Demand for Education: Evidence from the Coal Boom and Bust," ILR Review, Cornell University, ILR School, vol. 59(1), pages 3-16, October.
  8. Arild Aakvik & Kjell G. Salvanes & Kjell Vaage, 2005. "Educational Attainment and Family Background," German Economic Review, Verein für Socialpolitik, vol. 6(3), pages 377-394, 08.
  9. Jere R. Behrman & Mark R. Rosenzweig, 2002. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation?," American Economic Review, American Economic Association, vol. 92(1), pages 323-334, March.
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  11. Maurin, Eric, 2002. "The impact of parental income on early schooling transitions: A re-examination using data over three generations," Journal of Public Economics, Elsevier, vol. 85(3), pages 301-332, September.
  12. Carrington, William J, 1996. "The Alaskan Labor Market during the Pipeline Era," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 186-218, February.
  13. Markus Jäntti & Eva Österbacka & Oddbjörn Raaum & Tor Eriksson & Anders Björklund, 2002. "Brother correlations in earnings in Denmark, Finland, Norway and Sweden compared to the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(4), pages 757-772.
  14. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
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  16. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," American Economic Review, American Economic Association, vol. 95(1), pages 437-449, March.
  17. Shea, John, 2000. "Does parents' money matter?," Journal of Public Economics, Elsevier, vol. 77(2), pages 155-184, August.
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