Recent studies have shown that a large and significant association between parental background and children earnings still emerges when controlling for children education in some EU countries (e.g., Italy and the UK; Raitano and Vona, 2015). Thus, the process of intergenerational transmission of inequality might not be fully mediated by children’s educational attainment. However, what drives this association is still an open question, since an advantage for a child coming from a better origin, compared to a child with the same education but coming from a less advantaged
background, might be related both to better unobservable abilities background related and to social connections/networks. Distinguishing further abilities over education and social connections is extremely complex in empirical settings since good proxies of abilities and networks are usually not available. Making use of the Programme for the International Assessment of Adult Competencies (PIAAC) dataset delivered in 2005 by the OECD that records several characteristics of individuals’ educational path and reports individual scores in tests about literacy and numeracy, that may be considered as good proxies of individuals’ abilities, this paper aims instead at inquiring into the mechanisms behind the association between family background and offspring’s earnings. In more detail, we carry out empirical analyses on people aged 30-54 living in 7 major OECD countries belonging to different welfare regimes – France, Germany, Italy, Spain, Norway, UK, USA – to study whether the association between parental characteristics and children earnings is wholly mediated by the educational attainment and by further characteristics of the individual educational path (e.g., the field of study) or a further “residual” association persists also when controlling for these characteristics. Furthermore, arguing that test scores in literacy and numeracy are good proxies of individual’s abilities, we also include these scores as covariates in our estimates to observe whether this possible residual association between parents’ characteristics and children earnings disappears when proxies of unobservable abilities are taken into account or a significant “residual” association still emerges also when controlling for individuals’ literacy and numeracy, thus suggesting that, apart from individual abilities, parents’ social connections might play a role in affecting children earnings.
Franco Bonomi Bezzo, ISER
Date & time:
30 May 2018 12:00 pm - 30 May 2018 13:00 pm
2N2.4.16 - ISER Large Seminar Room
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