Parents' Preference and Expectation for Their Child's Educational Track, and the Child's Education and Labor Market Outcomes as an Adult

Parents’ educational preferences and expectations are central in models of parental human-capital investment. Preferences reflect parents’ tastes about the child’s schooling. Expectations summarize parents’ information about the child’s likely educational track. Each can shape investments and, in turn, adult outcomes. Testing these mechanisms requires longitudinal data that connect early parental reports to realized outcomes decades later. We use the Swedish Individual Development and Adaptation (IDA) data. When cohort members were about age 13, parents reported the track they preferred and the track they expected. We link these reports to administrative records on education, annual earnings, employment, and disability benefits in adulthood. Controlling for sex, birth year, family background, and age-13 cognitive test scores, cohort members whose parents expected the academic track completed, on average, 0.28 more levels of education (on a 1–6 scale) than those whose parents had the same preference but expected the vocational track. They were also 12.8 percentage points more likely to complete post-secondary education. In the corresponding comparisons, cohort members whose parents preferred the academic track earned, on average, 14% more per year than those whose parents had the same expectation but preferred the vocational track. This difference is concentrated after age 45. The preference-related earnings gap rises with the child’s cognitive test score. It is about 22% at the mean score and about 40% at one standard deviation above the mean. Because parental preference and expectation coincide for most families, this cannot be cleanly attributed to preferences rather than expectations. Even so, holding one parental report constant while varying the other yields different patterns for schooling and earnings. This helps clarify how parental motives and information should be represented in empirical work on intergenerational mobility.