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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 for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp246
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    References listed on IDEAS

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    1. 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.
    2. Anne Case & I-Fen Lin & Sara McLanahan, 2000. "Educational Attainment in Blended Families," NBER Working Papers 7874, National Bureau of Economic Research, Inc.
    3. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
    4. Bruce Sacerdote, 2002. "The Nature and Nurture of Economic Outcomes," American Economic Review, American Economic Association, vol. 92(2), pages 344-348, May.
    5. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
    6. Shea, John, 2000. "Does parents' money matter?," Journal of Public Economics, Elsevier, vol. 77(2), pages 155-184, August.
    7. Taubman, Paul, 1989. "Role of Parental Income in Educational Attainment," American Economic Review, American Economic Association, vol. 79(2), pages 57-61, May.
    8. Ermisch, John F & Francesconi, Marco, 1997. "Family Matters," CEPR Discussion Papers 1591, C.E.P.R. Discussion Papers.
    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. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
    12. Vijverberg, Wim P. M., 1997. "Monte Carlo evaluation of multivariate normal probabilities," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 281-307.
    13. 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.
    14. 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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    Citations

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    Cited by:

    1. 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.
    2. Grant Johnston, 2004. "Healthy, wealthy and wise? A review of the wider benefits of education," Treasury Working Paper Series 04/04, New Zealand Treasury.
    3. Nathalie Chusseau & Joel Hellier, 2012. "Education, Intergenerational Mobility and Inequality," Working Papers 261, ECINEQ, Society for the Study of Economic Inequality.
    4. Hart, Robert A & Moro, Mirko & Roberts, J Elizabeth, 2015. "Who gained from the introduction of free universal secondary education in England and Wales?," Stirling Economics Discussion Papers 2015-02, University of Stirling, Division of Economics.
    5. Nicolas Bauduin & Joël Hellier, 2006. "Skill Dynamics, Inequality and Social Policies," Working Papers 34, ECINEQ, Society for the Study of Economic Inequality.
    6. Jacobs, Bas, 2007. "Real options and human capital investment," Labour Economics, Elsevier, vol. 14(6), pages 913-925, December.

    More about this item

    Keywords

    family income; Intergenerational mobility; human capital; adoption;

    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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