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Parental Education and Child’s Education: A Natural · PDF fileParental Education and Child’s Education: A Natural Experiment Arnaud Chevalier University College Dublin, London

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  • IZA DP No. 1153

    Parental Education and Childs Education:A Natural Experiment

    Arnaud Chevalier

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    Forschungsinstitutzur Zukunft der ArbeitInstitute for the Studyof Labor

    May 2004

  • Parental Education and Childs

    Education: A Natural Experiment

    Arnaud Chevalier University College Dublin,

    London School of Economics and IZA Bonn

    Discussion Paper No. 1153 May 2004

    IZA

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    Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available on the IZA website (www.iza.org) or directly from the author.

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  • IZA Discussion Paper No. 1153 May 2004

    ABSTRACT

    Parental Education and Childs Education: A Natural Experiment

    Is the intergenerational educational link due to nature or nurture? In order to answer this dilemma, this paper identifies the effect of parental education on their offsprings schooling attainment using a discontinuity in the parental educational attainment. The discontinuity stems from changes in the minimum school leaving age legislation which took place in the Seventies in Britain. This strategy identifies the effect of parental schooling only for parents with a lower taste for education and may not reflect the general social returns of parental education. However, since policies are more likely to target children at risk of not maximising their educational potential, the estimates are of interest. Contrary to recent evidence, we find a positive effect of both parents education on their childrens schooling achievements when focusing on natural parents only. Step parents have no or a negative impact on childrens education. In most cases, the endogeneity of parental education is rejected. These estimates suggest substantial social returns to education for same-sex parent. The estimates are robust to the introduction of additional controls for income, labour force participation, fertility and neighbourhood quality, indicating that the effect of parental education is direct. JEL Classification: I20, J62 Keywords: educational choice, intergenerational effect Arnaud Chevalier University College Dublin Department of Economics Dublin 4 Ireland Email: [email protected]

    Data was made available by the UK Data Archive. Support from the Nuffield Foundation under the small grant scheme is gratefully acknowledged. Tarja Viitanen should be thanked for her research assistance. This paper also benefited from comments during presentations at the Tinbergen Institute Amsterdam, and at the universities of Aberdeen and Kent, as well as meetings of the European Society of Population Economics (New York), the Royal Economic Society (Swansea) and the Society of Labor Economics (San Antonio). The usual disclaimer applies.

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  • Parental education and childs education: A natural experiment

    Arnaud Chevalier* (UCD, LSE, IZA)

    Draft 1.6 May 2004

    Abstract: Is the intergenerational educational link due to nature or nurture? In order to answer this dilemma, this paper identifies the effect of parental education on their offsprings schooling attainment using a discontinuity in the parental educational attainment. The discontinuity stems from changes in the minimum school leaving age legislation which took place in the Seventies in Britain. This strategy identifies the effect of parental schooling only for parents with a lower taste for education and may not reflect the general social returns of parental education. However, since policies are more likely to target children at risk of not maximising their educational potential, the estimates are of interest. Contrary to recent evidence, we find a positive effect of both parents education on their childrens schooling achievements when focusing on natural parents only. Step parents have no or a negative impact on childrens education. In most cases, the endogeneity of parental education is rejected. These estimates suggest substantial social returns to education for same-sex parent. The estimates are robust to the introduction of additional controls for income, labour force participation, fertility and neighbourhood quality, indicating that the effect of parental education is direct. Keyword: Educational choice, intergenerational effect JEL Classification: I20, J62 Acknowledgements: Data was made available by the UK Data Archive. Support from the Nuffield Foundation under the small grant scheme is gratefully acknowledged. Tarja Viitanen should be thanked for her research assistance. This paper also benefited from comments during presentations at the Tinbergen Institute Amsterdam, and at the universities of Aberdeen and Kent, as well as meetings of the European Society of Population Economics (New York), the Royal Economic Society (Swansea) and the Society of Labor Economics (San Antonio). The usual disclaimer applies.

    * Arnaud Chevalier, University College Dublin, Department of Economics, Dublin 4, Ireland. Phone: +353 (1) 716 8240, Email: [email protected] The author is also a research associate at the Centre for the Economics of Education, London School of Economics and IZA.

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  • I Introduction

    Parents and the family environment influence the behaviour and decisions taken by

    adolescents. There is a tradition for social scientists to study this intergenerational link

    and its effects on child development, health and various adult outcomes. Economists have

    mainly focused on the effect of parental background on income, social class, or exit from

    poverty. Typically these studies have found a strong link between the earnings of the

    father and his offspring. For example, the intergenerational correlation in earnings

    between father and son reaches between 0.40 and 0.50 in the US (Solon, 1999) and 0.60

    in the UK (Dearden et al, 1997).

    The mechanism of this intergenerational correlation in earnings is still subject to

    debate, but education is a likely culprit. The elasticity for intergenerational mobility in

    education ranges from 0.14 to 0.45 in the US (Mulligan, 1999) and 0.25 to 0.40 in the UK

    (Dearden et al., 1997). The common view is that more educated parents provide an

    environment, which improves their childrens opportunities and decision processes. This

    assumption was, for example, the base of World Bank programmes to improve female

    education with evidence that more educated mothers have healthier children1. There is

    also a wealth of evidence on the positive relationship between parental education,

    especially mothers education, and offsprings education2. Policies increasing education

    appear to have a positive effect on the second generation.

    Whilst intergenerational correlation is education has been largely documented, the

    current debate is on the causality of this link. This knowledge has important

    1 This relationship between mothers education and children birth weight (a main predictor of child health) is found in the developing world (Behrman, 1997) but also in the US (Currie and Moretti, 2003).

    2

  • consequences for designing policies reducing educational inequality. This is an important

    issue, especially in Britain where the recent governments have targeted breaking the

    cycle of poverty between generations and reducing the proportion of children leaving

    school at 16. Interventions on the parental generation will generate social returns on the

    second generation only if the intergenerational educational link is causal, due to nurture,

    rather than just reflecting a nature (selection) effect. Finding small or no direct effect of

    parental education on their children would advocate policies targeted directly at the

    second generation children.

    The next section reviews the literature. The identification strategy, which relies on

    a change in the school leaving age legislation at the parental generation to estimate the

    causal effect of parental education, is presented in the third section. The British data used

    for the analysis are presented in section IV, as well as some preliminary analysis of the

    intergenerational link in education. Section V reports the results of the base models as

    well as tests of the

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