Does Increasing Parents' Schooling Raise the Schooling of the Next Generation? Evidence Based on Conditional Second Moments

28 Pages Posted: 2 Feb 2009

See all articles by Lidia Farré

Lidia Farré

Spanish Council for Scientific Research (CSIC) - Institute for Economic Analysis; Universidad de Alicante

Roger W. Klein

Rutgers, The State University of New Jersey - Department of Economics

Francis Vella

Georgetown University; IZA Institute of Labor Economics

Abstract

This paper investigates the degree of intergenerational transmission of education for individuals from the National Longitudinal Survey of Youth 1979. Rather than identifying the causal effect of parental education via instrumental variables we exploit the feature of the transmission mechanism responsible for its endogeneity. More explicitly, we assume the intergenerational transfer of unobserved ability is invariant to the economic environment. This, combined with the heteroskedasticity resulting from the interaction of unobserved ability with socioeconomic factors, identifies this causal effect. We conclude the observed intergenerational educational correlation reflects both a causal parental educational effect and a transfer of unobserved ability.

Keywords: intergenerational mobility, endogeneity, conditional correlation

JEL Classification: C31, J62

Suggested Citation

Farré, Lidia and Klein, Roger W. and Vella, Francis, Does Increasing Parents' Schooling Raise the Schooling of the Next Generation? Evidence Based on Conditional Second Moments. IZA Discussion Paper No. 3967, Available at SSRN: https://ssrn.com/abstract=1336084

Lidia Farré (Contact Author)

Spanish Council for Scientific Research (CSIC) - Institute for Economic Analysis ( email )

UAB Campus
E-08193 Bellaterra
Spain

Universidad de Alicante ( email )

Campus de San Vicente
Carretera San Vicente del Raspeig
San Vicente del Raspeig, Alicante 03690
Spain

Roger W. Klein

Rutgers, The State University of New Jersey - Department of Economics ( email )

75 Hamilton Street
New Brunswick, NJ 08901
United States

Francis Vella

Georgetown University ( email )

Washington, DC 20057
United States
202-687-5573 (Phone)

HOME PAGE: http://explore.georgetown.edu/people/fgv/

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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