Working Paper: NBER ID: w10164
Authors: Philip Oreopoulos; Marianne E. Page; Ann Huff Stevens
Abstract: The strong correlation between parents' economic status and that of their children has been well-documented, but little is known about the extent to which this is a causal phenomenon. This paper attempts to improve our understanding of the causal processes that contribute to intergenerational immobility by exploiting historical changes in compulsory schooling laws that affected the educational attainment of parents without affecting their innate abilities or endowments. We examine the influence of parental compulsory schooling on grade retention status for children aged 7 to 15 using the 1960, 1970 and 1980 U.S. Censuses. Our estimates indicate that a one-year increase in the education of either parent reduces the probability that a child repeats a grade by between two and seven percentage points. Among 15 to 16 year olds living at home, we also estimate that parental compulsory schooling significantly lowers the likelihood of dropping out. These findings suggest that education policies may be able to reduce part of the intergenerational transmission of inequality.
Keywords: Human Capital; Intergenerational Mobility; Compulsory Schooling
JEL Codes: I2; J6
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Parental Education (I24) | Children's Grade Retention (I21) |
| Parental Education (I24) | Children's Dropout Probability (I21) |
| Compulsory Schooling Laws (I21) | Parental Education (I24) |
| Compulsory Schooling Laws (I21) | Children's Educational Outcomes (I21) |
| Parental Education (I24) | Omitted Variable Bias Reduction (C29) |