IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

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

  • 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)

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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

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

Paper provided by Geary Institute, University College Dublin in its series Working Papers with number 201032.

as
in new window

Length: 32 pages
Date of creation: 01 Jul 2010
Date of revision:
Handle: RePEc:ucd:wpaper:201032
Contact details of provider: Postal:
Arts Annexe, Belfield, Dublin 4

Phone: +353 1 7164615
Fax: +353 1 7161108
Web page: http://www.ucd.ie/geary/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Harmon, C & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
  2. Björklund, Anders & Lindahl, Mikael & Plug, Erik, 2005. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," IZA Discussion Papers 1739, Institute for the Study of Labor (IZA).
  3. Pedro Carneiro & Costas Meghir & Matthias Parey, 2010. "Maternal education, home environments and the development of children and adolescents," CeMMAP working papers CWP39/10, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  4. 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.
  5. Jo Blanden & Paul Gregg, 2004. "Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain," CEE Discussion Papers 0041, Centre for the Economics of Education, LSE.
  6. Eric Maurin & Sandra McNally, 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.
  7. Sandra E. Black & Paul J. Devereux, 2010. "Recent developments in intergenerational mobility," Working Papers 201010, School of Economics, University College Dublin.
  8. Douglas Almond & Janet Currie, 2010. "Human Capital Development Before Age Five," NBER Working Papers 15827, National Bureau of Economic Research, Inc.
  9. Løken, Katrine Vellesen, 2007. "Family income and children's education: Using the Norwegian oil boom as a natural experiment," Working Papers in Economics 03/07, University of Bergen, Department of Economics.
  10. 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.
  11. Heckman, James J. & Masterov, Dimitriy V., 2004. "Skill Policies for Scotland," IZA Discussion Papers 1444, Institute for the Study of Labor (IZA).
  12. Colm Harmon & Ian Walker, 1995. "Estimates of the economic return to schooling for the United Kingdom," Open Access publications 10197/647, School of Economics, University College Dublin.
  13. 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.
  14. Casey B. Mulligan, 1999. "Galton versus the Human Capital Approach to Inheritance," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S184-S224, December.
  15. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2002. "Does education raise productivity, or just reflect it?," Open Access publications 10197/1104, School of Economics, University College Dublin.
  16. Jenkins, Stephen P. & Schluter, Christian, 2002. "The effect of family income during childhood on later-life attainment: evidence from Germany," ISER Working Paper Series 2002-20, Institute for Social and Economic Research.
  17. Lorraine Dearden & Stephen Machin & H Reed, 1996. "Intergenerational Mobility in Britain," CEP Discussion Papers dp0281, Centre for Economic Performance, LSE.
  18. 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).
  19. 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.
  20. Haroon Chowdry & Claire Crawford & Lorraine Dearden & Alissa Goodman & Anna Vignoles, 2010. "Widening Participation in Higher Education: Analysis Using Linked Administrative Data," DoQSS Working Papers 10-08, Department of Quantitative Social Science - UCL Institute of Education, University College London.
  21. 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 679-85, May.
  22. 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.
  23. 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 615-51, September.
  24. Arnaud Chevalier, 2004. "Parental Education and Childs Education: A Natural Experiment," CEE Discussion Papers 0040, Centre for the Economics of Education, LSE.
  25. Bruce Sacerdote, 2004. "What Happens When We Randomly Assign Children to Families?," NBER Working Papers 10894, National Bureau of Economic Research, Inc.
  26. 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.
  27. 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.
  28. 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 143-49, January.
  29. 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).
  30. 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).
  31. 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.
  32. 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.
  33. 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.
  34. 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).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

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)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.