Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital

FRB of San Francisco Working Paper No. 2004-12

29 Pages Posted: 18 Oct 2004

See all articles by Sandra E. Black

Sandra E. Black

Columbia University; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; NHH Norwegian School of Economics - Department of Economics

Paul J. Devereux

University College Dublin - Department of Economics; IZA Institute of Labor Economics

Kjell G. Salvanes

NHH Norwegian School of Economics - Department of Economics; IZA Institute of Labor Economics

Multiple version iconThere are 4 versions of this paper

Date Written: July 2004

Abstract

Parents with higher education levels have children with higher education levels. However, is this because parental education actually changes the outcomes of children, suggesting an important spillover of education policies, or is it merely that more able individuals who have higher education also have more able children? This paper proposes to answer this question with a unique dataset from Norway. Using the reform of the education system that was implemented in different municipalities at different times in the 1960s as an instrument for parental education, we find little evidence of a causal relationship between parents' education and children's education, despite significant OLS relationships. We find 2SLS estimates that are consistently lower than the OLS estimates, with the only statistically significant effect being a positive relationship between mother's education and son's education. These findings suggest that the high correlations between parents' and children's education are due primarily to family characteristics and inherited ability and not education spillovers.

Keywords: Intergenerational mobility, education, educational reform

JEL Classification: I21, J13, J24

Suggested Citation

Black, Sandra E. and Devereux, Paul J. and Salvanes, Kjell G., Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital (July 2004). FRB of San Francisco Working Paper No. 2004-12, Available at SSRN: https://ssrn.com/abstract=605783 or http://dx.doi.org/10.2139/ssrn.605783

Sandra E. Black (Contact Author)

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Paul J. Devereux

University College Dublin - Department of Economics ( email )

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IZA Institute of Labor Economics

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Germany

Kjell G. Salvanes

NHH Norwegian School of Economics - Department of Economics ( email )

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N-5035 Bergen
Norway
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+47 5 595 9543 (Fax)

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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