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Why the apple doesn’t fall far : understanding intergenerational transmission of human capital

Black, Sandra E.; Devereux, Paul J.; Salvanes, Kjell Gunnar
Working paper
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URI
http://hdl.handle.net/11250/162850
Date
2003-10
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  • Discussion papers (SAM) [586]
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 by using 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 selection and not causation.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2003:20

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