Do sibling correlations in skills, schooling, and earnings vary by socioeconomic background? Insights from Sweden

Erika Forsberg, Akib Khan and Olof Rosenqvist

Labour Economics, 2025, vol. 96, issue C

Abstract: Family background shapes individual outcomes across the life cycle. While research documents how family background importance varies across countries, less is known about heterogeneities across socioeconomic groups within countries. Using comprehensive Swedish register data, we compare sibling correlations—a more holistic measure of family influence than direct parent–child associations—in skills, schooling, and earnings across fine-grained groups defined by parental socioeconomic status (SES). We find that sibling correlations generally decline with parental SES. This pattern holds across cognitive skills, schooling, and earnings, and is robust to alternative definitions of parental SES. The decline is particularly pronounced when comparing the lowest decile to higher SES groups. For education and earnings, the decline in sibling correlations at higher SES levels is primarily driven by increased within-family variation, suggesting siblings in advantaged families develop more individualized paths. For skills, the decline reflects decreasing between-family variation. This result is consistent with theories on reinforcing parental investments, though other mechanisms, including complementarities between investments and abilities, credit constraints faced by low-SES families and broader poverty traps, may also contribute. Our results suggest that children from low-SES backgrounds not only have worse average outcomes than those from high-SES homes but also face constraints on individual development. This study provides insights into how equality of opportunity varies across the socioeconomic spectrum, revealing nuances in family influence that country-level averages may obscure.

Keywords: Sibling correlations; Skills; Education; Earnings; Socioeconomic background; Sweden (search for similar items in EconPapers)
JEL-codes: I24 J24 J62 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:96:y:2025:i:c:s092753712500065x

DOI: 10.1016/j.labeco.2025.102741

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