TY  - RPRT
        AU  - Belzil, Christian
AU  - Hansen, Jörgen
        TI  - Structural Estimates of the Intergenerational Education Correlation
        PY  - 2003/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 973
        UR  - https://www.iza.org/index.php/publications/dp973
        AB  - 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.
        KW  - dynamic programming
KW  - household characteristics
KW  - endogenous schooling
KW  - intergenerational education correlation
        ER  -