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Does Family Background Affect Earnings through Education? A Generalised Approach to Mediation Analysis

Author

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  • Mendolia, Silvia

    (University of Torino)

  • Siminski, Peter

    (University of Technology, Sydney)

Abstract

We seek to quantify the role of education as a mechanism through which family background affects earnings. To this end, we propose a generalisation of statistical 'mediation analysis'. In our approach, the treatment and mediator can be multidimensional. This allows us to directly and flexibly account for a range of background characteristics which affect child earnings through the pathway of education and through other mechanisms. The results suggest that educational attainment explains 24%-39% of the overall family background effect on earnings in Australia. The mediating role of education seems to be larger for Australia than for the UK.

Suggested Citation

  • Mendolia, Silvia & Siminski, Peter, 2016. "Does Family Background Affect Earnings through Education? A Generalised Approach to Mediation Analysis," IZA Discussion Papers 9917, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9917
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    References listed on IDEAS

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    Cited by:

    1. Arturo Martinez Jr. & Tina Rampino & Mark Western & Wojtek Tomaszewski & Jude David Roque, 2017. "Estimating the Contribution of Circumstances that Reflect Inequality of Opportunities," Economic Papers, The Economic Society of Australia, vol. 36(4), pages 380-400, December.
    2. Chelsea Murray & Robert Graham Clark & Silvia Mendolia & Peter Siminski, 2018. "Direct Measures of Intergenerational Income Mobility for Australia," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 445-468, December.

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    More about this item

    Keywords

    equality of opportunity; intergenerational mobility; mediation analysis;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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