October 2003 | Sandra E. Black, Paul J. Devereux, Kjell G. Salvanes
This paper examines the intergenerational transmission of human capital, specifically the relationship between parental education and children's educational outcomes. Using a unique dataset from Norway, the authors employ the 1960s education reform as an instrumental variable to estimate the causal impact of parental education on children's education. The reform, which extended compulsory schooling from seven to nine years, was implemented differently in different municipalities at different times, providing variation in parental education that is exogenous to parental ability.
The authors find little evidence of a causal relationship between parental education and children's education, despite significant ordinary least squares (OLS) relationships. Two-stage least squares (2SLS) estimates are consistently lower than OLS estimates, with the only statistically significant effect being a positive relationship between mother's education and son's education. This suggests that the high correlations between parents' and children's education are primarily due to family characteristics and inherited ability, rather than education spillovers.
The paper discusses the methodology, data sources, and robustness checks, including specification checks and the use of sibling fixed effects. It concludes that the true causal effect of parental education on child education appears to be weak, supporting the view that the observed correlations are driven by selection rather than causation.This paper examines the intergenerational transmission of human capital, specifically the relationship between parental education and children's educational outcomes. Using a unique dataset from Norway, the authors employ the 1960s education reform as an instrumental variable to estimate the causal impact of parental education on children's education. The reform, which extended compulsory schooling from seven to nine years, was implemented differently in different municipalities at different times, providing variation in parental education that is exogenous to parental ability.
The authors find little evidence of a causal relationship between parental education and children's education, despite significant ordinary least squares (OLS) relationships. Two-stage least squares (2SLS) estimates are consistently lower than OLS estimates, with the only statistically significant effect being a positive relationship between mother's education and son's education. This suggests that the high correlations between parents' and children's education are primarily due to family characteristics and inherited ability, rather than education spillovers.
The paper discusses the methodology, data sources, and robustness checks, including specification checks and the use of sibling fixed effects. It concludes that the true causal effect of parental education on child education appears to be weak, supporting the view that the observed correlations are driven by selection rather than causation.