Resource title

Structural estimates of the intergenerational education correlation

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Resource description

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.

Resource author

Christian Belzil, J├Ârgen Hansen

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Resource language

eng

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text/html

Resource resource URL

http://hdl.handle.net/10419/20209

Resource license

Adapt according to the presented license agreement and reference the original author.