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Structural Estimates of the Intergenerational Education Correlation

Author

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  • Belzil, Christian

    () (Ecole Polytechnique, Paris)

  • Hansen, Jörgen

    () (Concordia University)

Abstract

Using a structural dynamic programming model, we investigate the relative importance of family background variables and individual specific abilities in explaining cross-sectional differences in schooling attainments and wages. Given scholastic ability, household background variables (especially parents' education) account for 68% of the explained crosssectional variations in schooling attainments. When the effects of household background variables on ability are also taken into account, the percentage raises to 85%. However, individual differences in wages are mostly explained by abilities. Only 27% of the explained variation in wages is accounted for by parents’ background variables as opposed to 73% by unobserved abilities (orthogonal to family background variables). When scholastic ability is correlated with family background variables, ability endowments explain as much as 81% of individual wages.

Suggested Citation

  • Belzil, Christian & Hansen, Jörgen, 2003. "Structural Estimates of the Intergenerational Education Correlation," IZA Discussion Papers 973, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp973
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    References listed on IDEAS

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    1. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, pages 473-522.
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    Cited by:

    1. Belzil, Christian & Leonardi, Marco, 2007. "Can risk aversion explain schooling attainments? Evidence from Italy," Labour Economics, Elsevier, pages 957-970.
    2. Belzil, Christian & Hansen, Jorgen, 2007. "A structural analysis of the correlated random coefficient wage regression model," Journal of Econometrics, Elsevier, vol. 140(2), pages 827-848, October.
    3. Belzil, Christian, 2007. "The return to schooling in structural dynamic models: a survey," European Economic Review, Elsevier, pages 1059-1105.
    4. Christian Belzil, 2008. "Testing the Specification of the Mincer Wage Equation," Annals of Economics and Statistics, GENES, pages 427-451.
    5. Helena Holmlund & Mikael Lindahl & Erik Plug, 2011. "The Causal Effect of Parents' Schooling on Children's Schooling: A Comparison of Estimation Methods," Journal of Economic Literature, American Economic Association, pages 615-651.
    6. Perelman, Julian, 2014. "Are chronic diseases related to height? Results from the Portuguese National Health Interview Survey," Economics & Human Biology, Elsevier, pages 56-66.
    7. Nikos Benos, 2005. "Education Systems, Growth and Welfare," University of Cyprus Working Papers in Economics 5-2005, University of Cyprus Department of Economics.
    8. Philipp Bauer & Regina Riphahn, 2006. "Education and its intergenerational transmission: country of origin-specific evidence for natives and immigrants from Switzerland," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 5(2), pages 89-110, August.
    9. Philipp Bauer & Regina Riphahn, 2007. "Heterogeneity in the intergenerational transmission of educational attainment: evidence from Switzerland on natives and second-generation immigrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(1), pages 121-148, February.
    10. Belzil, Christian & Hansen, Jörgen & Kristensen, Nicolai, 2008. "Estimating Complementarity between Education and Training," IZA Discussion Papers 3882, Institute for the Study of Labor (IZA).
    11. Sarah Brown & Steven Mcintosh & Karl Taylor, 2011. "Following in Your Parents’ Footsteps? Empirical Analysis of Matched Parent–Offspring Test Scores," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(1), pages 40-58, February.
    12. Belzil, Christian, 2004. "Un modèle économétrique dynamique de l’abandon scolaire au Québec et en Ontario," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(2), pages 363-381, Juin-Sept.
    13. Helena Holmlund & Mikael Lindahl & Erik Plug, 2011. "The Causal Effect of Parents' Schooling on Children's Schooling: A Comparison of Estimation Methods," Journal of Economic Literature, American Economic Association, pages 615-651.
    14. James McIntosh & Martin Munk, 2007. "Scholastic ability vs family background in educational success: evidence from Danish sample survey data," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(1), pages 101-120, February.
    15. Daouli, Joan & Demoussis, Michael & Giannakopoulos, Nicholas, 2010. "Mothers, fathers and daughters: Intergenerational transmission of education in Greece," Economics of Education Review, Elsevier, vol. 29(1), pages 83-93, February.
    16. Espinoza-Delgado, Jose & Klasen, Stephan, 2017. "Gender and Multidimensional Poverty in Nicaragua, An Individual-based Approach," MPRA Paper 81907, University Library of Munich, Germany.
    17. Frenette, Marc, 2005. "Is Post-secondary Access More Equitable in Canada or the United States?," Analytical Studies Branch Research Paper Series 2005244e, Statistics Canada, Analytical Studies Branch.
    18. Meunier, Muriel, 2011. "Immigration and student achievement: Evidence from Switzerland," Economics of Education Review, Elsevier, vol. 30(1), pages 16-38, February.
    19. Belzil, Christian & Hansen, Jörgen, 2005. "A Structural Analysis of the Correlated Random Coefficient Wage Regression Model with an Application to the OLS-IV Puzzle," IZA Discussion Papers 1585, Institute for the Study of Labor (IZA).
    20. Coneus, Katja & Sprietsma, Maresa, 2009. "Intergenerational transmission of human capital in early childhood," ZEW Discussion Papers 09-038, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    21. Garrouste, Christelle, 2010. "100 years of educational reforms in Europe: a contextual database," MPRA Paper 31853, University Library of Munich, Germany.
    22. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    23. Tubadji, Annie & Gheasi, Masood & Nijkamp, Peter, 2014. "Immigrants' 'Ability' and Welfare as a Function of Cultural Diversity: Effect of Cultural Capital at Individual and Local Level," IZA Discussion Papers 8460, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    dynamic programming; household characteristics; endogenous schooling; intergenerational education correlation;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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