IDEAS home Printed from https://ideas.repec.org/p/ucd/wpaper/201032.html
   My bibliography  Save this paper

The Impact of Parental Income and Education on the Schooling of their Children

Author

Listed:
  • Arnaud Chevalier

    (Royal Holloway - University of London and IZA)

  • Colm Harmon

    (University College Dublin and IZA)

  • Vincent O'Sullivan

    (University of Warwick)

  • Ian Walker

    (Lancaster University Management School and IZA)

Abstract

This paper addresses the intergenerational transmission of education and investigates the extent to which early school leaving (at age 16) may be due to variations in parental background. An important contribution of the paper is to distinguish between the causal effects of parental income and parental education levels. Least squares estimation reveals conventional results – weak effects of income (when the child is 16), stronger effects of maternal education than paternal, and stronger effects on sons than daughters. We find that the education effects remain significant even when household income is included. However, when we use instrumental variable methods to simultaneously account for the endogeneity of parental education and paternal income, only maternal education remains significant (for daughters only) and becomes stronger. These estimates are consistent to various set of instruments. The impact of paternal income varies between specifications but become insignificant in our preferred specification. Our results provide limited evidence that policies alleviating income constraints at age 16 can alter schooling decisions but that policies increasing permanent income would lead to increased participation (especially for daughters). There is also evidence of intergenerational transmissions of education choice from mothers to daughters.

Suggested Citation

  • Arnaud Chevalier & Colm Harmon & Vincent O'Sullivan & Ian Walker, 2010. "The Impact of Parental Income and Education on the Schooling of their Children," Working Papers 201032, Geary Institute, University College Dublin.
  • Handle: RePEc:ucd:wpaper:201032
    as

    Download full text from publisher

    File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201032.pdf
    File Function: First version, 2010
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    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. Maurin, Eric & McNally, Sandra, 2005. "Vive la revolution! Long term returns of 1968 to the angry students," LSE Research Online Documents on Economics 3656, London School of Economics and Political Science, LSE Library.
    3. Haroon Chowdry & Claire Crawford & Lorraine Dearden & Alissa Goodman & Anna Vignoles, 2013. "Widening participation in higher education: analysis using linked administrative data," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(2), pages 431-457, February.
    4. Jo Blanden, 2004. "Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain," Oxford Review of Economic Policy, Oxford University Press, vol. 20(2), pages 245-263, Summer.
    5. 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.
    6. Arnaud Chevalier, 2004. "Parental Education and Childs Education: A Natural Experiment," CEE Discussion Papers 0040, Centre for the Economics of Education, LSE.
    7. Erik Plug, 2004. "Estimating the Effect of Mother's Schooling on Children's Schooling Using a Sample of Adoptees," American Economic Review, American Economic Association, vol. 94(1), pages 358-368, March.
    8. 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.
    9. Dickson, Matt & Gregg, Paul & Robinson, Harriet, 2013. "Early, Late or Never? When Does Parental Education Impact Child Outcomes?," IZA Discussion Papers 7123, Institute for the Study of Labor (IZA).
    10. Björklund, Anders & Lindahl, Mikael & Plug, Erik, 2004. "Intergenerational Effects in Sweden: What Can We Learn from Adoption Data?," IZA Discussion Papers 1194, Institute for the Study of Labor (IZA).
    11. 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.
    12. 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, vol. 49(3), pages 615-651, September.
    13. Freeman, Richard B, 1994. "H. G. Lewis and the Study of Union Wage Effects," Journal of Labor Economics, University of Chicago Press, vol. 12(1), pages 143-149, January.
    14. Bruce Sacerdote, 2004. "What Happens When We Randomly Assign Children to Families?," NBER Working Papers 10894, National Bureau of Economic Research, Inc.
    15. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, Elsevier.
    16. Acemoglu, Daron & Pischke, J. -S., 2001. "Changes in the wage structure, family income, and children's education," European Economic Review, Elsevier, vol. 45(4-6), pages 890-904, May.
    17. Eric Maurin & Sandra McNally, 2008. "Vive la Révolution! Long-Term Educational Returns of 1968 to the Angry Students," Journal of Labor Economics, University of Chicago Press, vol. 26, pages 1-33.
    18. Jenkins, Stephen P. & Schluter, Christian, 2002. "The Effect of Family Income During Childhood on Later-Life Attainment: Evidence from Germany," IZA Discussion Papers 604, Institute for the Study of Labor (IZA).
    19. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-1286, December.
    20. Black, Sandra & Devereux, Paul J. & Salvanes, Kjell G, 2003. "Why the Apple Doesn't Fall: Understanding Intergenerational Transmission of Human Capital," CEPR Discussion Papers 4150, C.E.P.R. Discussion Papers.
    21. Dearden, Lorraine & Machin, Stephen & Reed, Howard, 1997. "Intergenerational Mobility in Britain," Economic Journal, Royal Economic Society, vol. 107(440), pages 47-66, January.
    22. Almond, Douglas & Currie, Janet, 2011. "Human Capital Development before Age Five," Handbook of Labor Economics, Elsevier.
    23. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2004. "Does Education Raise Productivity, or Just Reflect it?," Economic Journal, Royal Economic Society, vol. 114(499), pages 499-517, November.
    24. Philip Oreopoulos & Marianne E. Page & Ann Huff Stevens, 2003. "Does Human Capital Transfer from Parent to Child? The Intergenerational Effects of Compulsory Schooling," NBER Working Papers 10164, National Bureau of Economic Research, Inc.
    25. Lorraine Dearden & Carl Emmerson & Costas Meghir, 2009. "Conditional Cash Transfers and School Dropout Rates," Journal of Human Resources, University of Wisconsin Press, vol. 44(4).
    26. Casey B. Mulligan, 1999. "Galton versus the Human Capital Approach to Inheritance," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 184-224, December.
    27. Janet Currie & Enrico Moretti, 2003. "Mother's Education and the Intergenerational Transmission of Human Capital: Evidence from College Openings," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1495-1532.
    28. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-685, May.
    29. Paul Gregg & Susan Harkness & Stephen Machin, 1999. "Poor kids: trends in child poverty in Britain, 1968-96," Fiscal Studies, Institute for Fiscal Studies, vol. 20(2), pages 163-187, June.
    30. Løken, Katrine V., 2010. "Family income and children's education: Using the Norwegian oil boom as a natural experiment," Labour Economics, Elsevier, vol. 17(1), pages 118-129, January.
    31. Lundborg, Petter & Nordin, Martin & Rooth, Dan-Olof, 2011. "The Intergenerational Transmission of Human Capital: Exploring the Role of Skills and Health Using Data on Adoptees and Twins," IZA Discussion Papers 6099, Institute for the Study of Labor (IZA).
    32. Heckman, James J. & Masterov, Dimitriy V., 2004. "Skill Policies for Scotland," IZA Discussion Papers 1444, Institute for the Study of Labor (IZA).
    33. Arnaud Chevalier & Gauthier Lanot, 2002. "The Relative Effect of Family Characteristics and Financial Situation on Educational Achievement," Education Economics, Taylor & Francis Journals, vol. 10(2), pages 165-181.
    34. Harmon, Harmon & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Early school leaving; intergenerational transmission;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucd:wpaper:201032. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Geary Tech). General contact details of provider: http://edirc.repec.org/data/geucdie.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.