Structural estimates of the intergenerational education correlation

Arbeitspapier

Using a structural dynamic programming model, we investigate the relative importance of family background variables and individual specific abilities in explaining cross-sectional differences in schooling attainments and wages. Given scholastic ability, household background variables (especially parents' education) account for 68% of the explained crosssectional variations in schooling attainments. When the effects of household background variables on ability are also taken into account, the percentage raises to 85%. However, individual differences in wages are mostly explained by abilities. Only 27% of the explained variation in wages is accounted for by parents? background variables as opposed to 73% by unobserved abilities (orthogonal to family background variables). When scholastic ability is correlated with family background variables, ability endowments explain as much as 81% of individual wages.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 973

Classification and Topics

• Classification: Wirtschaft
• Subject: intergenerational education correlation ; endogenous schooling ; household characteristics ; dynamic programming ; Bildungsniveau ; Bildungsökonomik ; Soziale Mobilität ; Generationenbeziehungen ; Familiensoziologie ; Dynamische Optimierung ; Schätzung ; Vereinigte Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Belzil, Christian ; Hansen, Jörgen
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/20209
• Last update: 10.03.2025, 11:44 AM CET