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Schooling, Family Background, and Adoption: Does Family Income Matter?

Author

Listed:
  • Plug, Erik

    (University of Amsterdam)

  • Vijverberg, Wim P.

    (CUNY Graduate Center)

Abstract

One would expect that family income is an important positive factor in the school attainment of children. However, evidence on this relationship is often tainted by the lack of control for parental ability, since at least a portion of ability is transferred genetically to children. This paper considers empirical strategies that control for both observed and unobserved parental ability. In the end, family income still has a significant effect, which must therefore be causative. It implies that high-ability children in low-income families face binding credit constraints that society may wish to relieve.

Suggested Citation

  • Plug, Erik & Vijverberg, Wim P., 2001. "Schooling, Family Background, and Adoption: Does Family Income Matter?," IZA Discussion Papers 246, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp246
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    References listed on IDEAS

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    9. David M. Blau, 1999. "The Effect Of Income On Child Development," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 261-276, May.
    10. Case, Anne & Lin, I-Fen & McLanahan, Sara, 2000. "How Hungry Is the Selfish Gene?," Economic Journal, Royal Economic Society, vol. 110(466), pages 781-804, October.
    11. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts," NBER Working Papers 6385, National Bureau of Economic Research, Inc.
    12. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
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    14. Plug, Erik J. S. & van Praag, Bernard M. S. & Hartog, Joop, 1999. "If we knew ability, how would we tax individuals?," Journal of Public Economics, Elsevier, vol. 72(2), pages 183-211, May.
    15. Stephen Cameron & Christopher Taber, 2000. "Borrowing Constraints and the Returns to Schooling," NBER Working Papers 7761, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Nathalie Chusseau & Joël Hellier & B. Ben-Halima, 2013. "Education, Intergenerational Mobility and Inequality," Palgrave Macmillan Books, in: Joël Hellier & Nathalie Chusseau (ed.), Growing Income Inequalities, chapter 8, pages 227-273, Palgrave Macmillan.
    2. Bas Jacobs, 2002. "An investigation of education finance reform; graduate taxes and income contingent loans in the Netherlands," CPB Discussion Paper 9, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Grant Johnston, 2004. "Healthy, wealthy and wise? A review of the wider benefits of education," Treasury Working Paper Series 04/04, New Zealand Treasury.
    4. Erik Plug & Wim Vijverberg, 2003. "Schooling, Family Background, and Adoption: Is It Nature or Is It Nurture?," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 611-641, June.
    5. Colm Harmon, 2002. "Schooling returns, schooling decisions and educational finance," Open Access publications 10197/669, School of Economics, University College Dublin.
    6. Jacobs, Bas, 2007. "Real options and human capital investment," Labour Economics, Elsevier, vol. 14(6), pages 913-925, December.
    7. Bas Jacobs, 2002. "An investigation of education finance reform; graduate taxes and income contingent loans in the Netherlands," CPB Discussion Paper 9.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Nordblom, Katarina, 2003. "Is increased public schooling really a policy for equality?: The role of within-the-family education," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1943-1965, September.
    9. Robert A. HartBy & Mirko Moro & J. Elizabeth Roberts, 2017. "Who gained from the introduction of free universal secondary education in England and Wales?," Oxford Economic Papers, Oxford University Press, vol. 69(3), pages 707-733.
    10. Nicolas Bauduin & Joël Hellier, 2006. "Skill Dynamics, Inequality and Social Policies," Working Papers 34, ECINEQ, Society for the Study of Economic Inequality.

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    More about this item

    Keywords

    family income; Intergenerational mobility; human capital; adoption;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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