Does Family Income Matter for Schooling Outcomes? Using Adoptees as a Natural Experiment

28 Pages Posted: 7 Dec 2005

See all articles by Erik Plug

Erik Plug

University of Amsterdam - Amsterdam School of Economics (ASE); Tinbergen Institute; IZA Institute of Labor Economics

Wim P.M. Vijverberg

CUNY The Graduate Center - Department of Economics; IZA Institute of Labor Economics

Abstract

One would expect that family income is an important positive factor in children's school attainment. However, evidence is often tainted by the lack of control for parental ability, since at least a portion of ability is transferred genetically to children. This paper uses a sample of adopted children and offers genetically unbiased estimates. We further correct for biases arising from unobserved parenting qualities and from parents' differentiation between their own birth and adopted children. Family income still has a significant effect. It implies that high ability children in low income families face binding credit constraints that society may wish to relieve.

Suggested Citation

Plug, Erik and Vijverberg, Wim, Does Family Income Matter for Schooling Outcomes? Using Adoptees as a Natural Experiment. Economic Journal, Vol. 115, No. 506, pp. 879-906, October 2005. Available at SSRN: https://ssrn.com/abstract=856692 or http://dx.doi.org/10.1111/j.1468-0297.2005.01023.x

Erik Plug (Contact Author)

University of Amsterdam - Amsterdam School of Economics (ASE) ( email )

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Tinbergen Institute

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IZA Institute of Labor Economics

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Wim Vijverberg

CUNY The Graduate Center - Department of Economics ( email )

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New York, NY 10016
United States
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IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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