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

29 Pages Posted: 24 Jan 2006  

Orla Doyle

University College Dublin - Geary Institute

Colm P. Harmon

The University of Sydney - School of Economics; IZA Institute of Labor Economics

Ian Walker

University of Warwick - Department of Economics; Institute for Fiscal Studies (IFS); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 2005

Abstract

This paper investigates the robustness of recent findings on the effect of parental background on child health. We are particularly concerned with the extent to which their finding that income effects on child health are the result of spurious correlation rather than some causal mechanism. A similar argument can be made for the effect of education - if parental education and child health are correlated with some common unobservable (say, low parental time preference) then least squares estimates of the effect of parental education will be biased upwards. Moreover, it is very common for parental income data to be grouped, in which case income is measured with error and the coefficient on income will be biased towards zero and there are good reasons why the extent of bias may vary with child age. Fixed effect estimation is undermined by measurement error and here we adopt the traditional solution to both spurious correlation and measurement error and use an instrumental variables approach. Our results suggest that the income effects observed in the data are spurious.

Keywords: Child health, intergenerational transmission

JEL Classification: I1

Suggested Citation

Doyle, Orla and Harmon, Colm P. and Walker, Ian, The Impact of Parental Income and Education on the Health of their Children (November 2005). CEPR Discussion Paper No. 5359. Available at SSRN: https://ssrn.com/abstract=878136

Orla Doyle

University College Dublin - Geary Institute ( email )

Dublin 4, 4
Ireland

Colm P. Harmon (Contact Author)

IZA Institute of Labor Economics

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

The University of Sydney - School of Economics ( email )

Rm 370 Merewether (H04)
Sydney, NSW 2006 2008
Australia

Ian Walker

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
+44 1203 523 054 (Phone)
+44 1203 523 032 (Fax)

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

IZA Institute of Labor Economics

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

Paper statistics

Downloads
30
Abstract Views
771