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The causal effect of parents� schooling on children�s schooling in Europe. A new IV approach

Enkelejda Havari () and Marco Savegnago ()

No 2013:30, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: This paper estimates the causal effect of parental education on children�s education in 13 European countries, using representative data from the Survey of Health, Ageing and Retirement in Europe (SHARE). A novel instrumental variable approach is used to solve the endogeneity issue. We combine two instruments: parental birth order (indicator for being a first born) and Compulsory Schooling Laws (CSL). While CSL have been widely used in applied work, our contribution is to introduce parental birth order as instrument in the intergenerational mobility literature. We find that parental education has a positive, large and significant causal effect on children�s education. This finding is robust to the instrument chosen (birth order, CSL, or both), to sample selection and to several robustness checks.

Keywords: intergenerational transmission; causality; birth order; education; Europe (search for similar items in EconPapers)
JEL-codes: J01 J6 I2 I24 (search for similar items in EconPapers)
Pages: 36
Date: 2013
New Economics Papers: this item is included in nep-eur
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