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Intergeneration Transfer of Human Capital: Results from a Natural Experiment in Taiwan

Author

Listed:
  • Wehn-Jyuan Tsai
  • Jin-Tan Liu
  • Shin-Yi Chou
  • Michael Grossman

Abstract

We exploit a natural experiment to estimate the causal impact of parental education on educational outcomes of their children when they are high school seniors. In 1968, the Taiwanese government extended compulsory education from 6 to 9 years and opened over 150 new junior high schools at a differential rate among regions. We form treatment and control groups of women or men who were age 12 or under on the one hand and between the ages of 13 and 25 on the other hand in 1968. Within each region, we exploit variations across cohorts in new junior high school openings to construct an instrument for schooling. We employ this instrument to estimate the causal effects of mother's and father's schooling on their child's college entrance examination test scores in the years 2000-2003, on the probability that the child attended college and on the rank of the college attended. The schooling of each parent does cause their child to experience better educational outcomes. A one-year increase in the schooling of either parent raises the probability that the child attends one of the top six colleges in Taiwan by approximately 10 percent.

Suggested Citation

  • Wehn-Jyuan Tsai & Jin-Tan Liu & Shin-Yi Chou & Michael Grossman, 2011. "Intergeneration Transfer of Human Capital: Results from a Natural Experiment in Taiwan," NBER Working Papers 16876, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:16876
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    References listed on IDEAS

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    1. Anders Björklund & Mikael Lindahl & Erik Plug, 2006. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," The Quarterly Journal of Economics, Oxford University Press, vol. 121(3), pages 999-1028.
    2. Pedro Carneiro & Costas Meghir & Matthias Parey, 2013. "Maternal Education, Home Environments, And The Development Of Children And Adolescents," Journal of the European Economic Association, European Economic Association, vol. 11, pages 123-160, January.
    3. Neumark, David, 1999. "Biases in twin estimates of the return to schooling," Economics of Education Review, Elsevier, vol. 18(2), pages 143-148, April.
    4. Jere R. Behrman & Mark R. Rosenzweig, 2002. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation?," American Economic Review, American Economic Association, vol. 92(1), pages 323-334, March.
    5. Shin-Yi Chou & Jin-Tan Liu & Michael Grossman & Ted Joyce, 2010. "Parental Education and Child Health: Evidence from a Natural Experiment in Taiwan," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 33-61, January.
    6. Grossman, Michael, 2006. "Education and Nonmarket Outcomes," Handbook of the Economics of Education, Elsevier.
    7. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," American Economic Review, American Economic Association, vol. 95(1), pages 437-449, March.
    8. Arnaud Chevalier, 2004. "Parental Education and Childs Education: A Natural Experiment," CEE Discussion Papers 0040, Centre for the Economics of Education, LSE.
    9. Philip Oreopoulos & Marianne E. Page, 2006. "The Intergenerational Effects of Compulsory Schooling," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 729-760, October.
    10. Kate L. Antonovics & Arthur S. Goldberger, 2005. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation? Comment," American Economic Review, American Economic Association, vol. 95(5), pages 1738-1744, December.
    11. Damien de Walque, 2009. "Parental Education and Children's Schooling Outcomes: Evidence from Recomposed Families in Rwanda," Economic Development and Cultural Change, University of Chicago Press, vol. 57(4), pages 723-746, July.
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    Cited by:

    1. Rachel Heath & Seema Jayachandran, 2016. "The Causes and Consequences of Increased Female Education and Labor Force Participation in Developing Countries," Working Papers id:11434, eSocialSciences.

    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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