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Using Sibling Samples to Assess the Effect of Childhood Family Income on Completed Schooling

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  • Dan Maurice Levy
  • Greg Duncan

Abstract

We assess the impact of stage-specific family childhood income on completed years of schooling using fixed effects techniques to eliminate biases associated with the omission of unmeasured family characteristics. Sibling data from the Panel Study of Income Dynamics (PSID) indicate that family income during early childhood has a positive effect on children's educational attainment. The magnitude of the effect suggests that a 2.7-fold increase in parental income when the child is 0-4 years old leads to an increase of about half a year of schooling. We find that income during adolescence has a positive but less robust effect.

Suggested Citation

  • Dan Maurice Levy & Greg Duncan, 2000. "Using Sibling Samples to Assess the Effect of Childhood Family Income on Completed Schooling," JCPR Working Papers 168, Northwestern University/University of Chicago Joint Center for Poverty Research.
  • Handle: RePEc:wop:jopovw:168
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    References listed on IDEAS

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    1. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
    2. Shea, John, 2000. "Does parents' money matter?," Journal of Public Economics, Elsevier, vol. 77(2), pages 155-184, August.
    3. Shelly Lundberg & Robert A. Pollak, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-158, Fall.
    4. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
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    Cited by:

    1. Sandra E. Black & Paul J. Devereux & Katrine V. L�ken & Kjell G. Salvanes, 2014. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 824-837, December.
    2. Cunha, Flavio & Heckman, James J. & Lochner, Lance, 2006. "Interpreting the Evidence on Life Cycle Skill Formation," Handbook of the Economics of Education, Elsevier.
    3. María Fernanda Rosales, 2014. "Impact of Early Life Shocks on Human Capital Formation: El Niño Floods in Ecuador," IDB Publications (Working Papers) 87693, Inter-American Development Bank.
    4. Carneiro, Pedro & Lopez Garcia, Italo & Salvanes, Kjell G. & Tominey, Emma, 2015. "Intergenerational Mobility and the Timing of Parental Income," IZA Discussion Papers 9479, Institute for the Study of Labor (IZA).
    5. Rune V. Lesner, 2016. "The Long-Term Effect of Childhood Poverty," Economics Working Papers 2016-08, Department of Economics and Business Economics, Aarhus University.
    6. Coelli, Michael B., 2011. "Parental job loss and the education enrollment of youth," Labour Economics, Elsevier, vol. 18(1), pages 25-35, January.
    7. Loris Vergolini & Nadir Zanini, 2012. "How does aid matter? The effect of financial aid on university enrolment decisions," Working Papers 2012/7, Institut d'Economia de Barcelona (IEB).
    8. Vergolini, Loris & Zanini, Nadir, 2015. "Away, but not too far from home. The effects of financial aid on university enrolment decisions," Economics of Education Review, Elsevier, vol. 49(C), pages 91-109.
    9. Loris Vergolini & Nadir Zanini & Nicola Bazoli, 2014. "Liquidity Constraints and University Participation in Times of Recession. Evidence from a Small-scale Programme," FBK-IRVAPP Working Papers 2014-11, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    10. Michael B Coelli, 2009. "Parental Job Loss, Income Shocks and the Education Enrolment of Youth," Department of Economics - Working Papers Series 1060, The University of Melbourne.
    11. Katrine V. Løken & Magne Mogstad & Matthew Wiswall, 2012. "What Linear Estimators Miss: The Effects of Family Income on Child Outcomes," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 1-35, April.
    12. W. Jean Yeung & Miriam R. Linver, 2000. "Mediators of Income Effects on Young Children's Development," JCPR Working Papers 176, Northwestern University/University of Chicago Joint Center for Poverty Research.
    13. Johnson Rucker C & Schoeni Robert F, 2011. "The Influence of Early-Life Events on Human Capital, Health Status, and Labor Market Outcomes Over the Life Course," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(3), pages 1-57, September.
    14. Hedman, Lina & Manley, David & van Ham, Maarten, 2017. "Sorting out Neighbourhood Effects Using Sibling Data," IZA Discussion Papers 11178, Institute for the Study of Labor (IZA).
    15. Thomas Vartanian & Linda Houser, 2012. "The Effects of Childhood SNAP Use and Neighborhood Conditions on Adult Body Mass Index," Demography, Springer;Population Association of America (PAA), vol. 49(3), pages 1127-1154, August.

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