Structural Estimates of the Intergenerational Education Correlation

Christian Belzil

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Abstract: 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. Each type of ability is the sum of one component correlated with family background variables and a residual (orthogonal) component which is purely individual specific. Household background variables (especially parents' education) account for 68% of the explained cross-sectional variations in schooling attainments, while ability correlated with background variables accounts for 17% and pure individual specific ability accounts for 15%. Interestingly, individual differences in wages are mostly explained by pure individual specific abilities as they account for as much as 73% of the explained variations in wages. Family background variables account for only 19%, while ability endowments correlated with family background account for 8%.

Date: 2003
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Published in Journal of Applied Econometrics, 2003, 18 (6), pp.679-696. ⟨10.1002/jae.716⟩

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Related works:
Working Paper: Structural Estimates of the Intergenerational Education Correlation (2010)
Working Paper: Structural Estimates of the Intergenerational Education Correlation (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00541883

DOI: 10.1002/jae.716

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