IDEAS home Printed from https://ideas.repec.org/a/eee/ecoedu/v59y2017icp1-12.html
   My bibliography  Save this article

Is education the mechanism through which family background affects economic outcomes? A generalised approach to mediation analysis

Author

Listed:
  • Mendolia, Silvia
  • Siminski, Peter

Abstract

We seek to quantify the role of education as a mechanism through which family background affects economic outcomes. To this end, we generalise mediation analysis to allow for multidimensional treatments. This improves the validity of mediation analysis for our application, in which family background is exogenous and multidimensional. Our approach allows the mediating role of education to vary across background characteristics, whilst also estimating its overall mediating effect. We estimate that educational attainment explains 21%–37% of the family background effect on hourly earnings in Australia, and only 13%–19% of the effect on wealth. We argue that these estimates are likely upward-biased. Therefore the link between family background and economic outcomes operates mostly through other mechanisms.

Suggested Citation

  • Mendolia, Silvia & Siminski, Peter, 2017. "Is education the mechanism through which family background affects economic outcomes? A generalised approach to mediation analysis," Economics of Education Review, Elsevier, vol. 59(C), pages 1-12.
    • Handle: RePEc:eee:ecoedu:v:59:y:2017:i:c:p:1-12
    DOI: 10.1016/j.econedurev.2017.05.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0272775716305982
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econedurev.2017.05.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2007. "Accounting for Intergenerational Income Persistence: Noncognitive Skills, Ability and Education," Economic Journal, Royal Economic Society, vol. 117(519), pages 43-60, March.
    2. Jo Blanden, 2013. "Cross-Country Rankings In Intergenerational Mobility: A Comparison Of Approaches From Economics And Sociology," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 38-73, February.
    3. Bruce Hollingsworth & Anthony Scott & Sandy Tubeuf & Florence Jusot & Damien Bricard, 2012. "Mediating Role Of Education And Lifestyles In The Relationship Between Early‐Life Conditions And Health: Evidence From The 1958 British Cohort," Health Economics, John Wiley & Sons, Ltd., vol. 21, pages 129-150, June.
    4. Silvia Mendolia & Peter Siminski, 2016. "New Estimates of Intergenerational Mobility in Australia," The Economic Record, The Economic Society of Australia, vol. 92(298), pages 361-373, September.
    5. James J. Heckman & Rodrigo Pinto, 2015. "Econometric Mediation Analyses: Identifying the Sources of Treatment Effects from Experimentally Estimated Production Technologies with Unmeasured and Mismeasured Inputs," Econometric Reviews, Taylor & Francis Journals, vol. 34(1-2), pages 6-31, February.
    6. Blanden, Jo, 2013. "Cross-national rankings of intergenerational mobility: a comparison of approaches from economics and sociology," LSE Research Online Documents on Economics 59310, London School of Economics and Political Science, LSE Library.
    7. Darren Lubotsky & Martin Wittenberg, 2006. "Interpretation of Regressions with Multiple Proxies," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 549-562, August.
    8. Sandy Tubeuf & Florence Jusot & Damien Bricard, 2012. "Mediating Role Of Education And Lifestyles In The Relationship Between Early‐Life Conditions And Health: Evidence From The 1958 British Cohort," Health Economics, John Wiley & Sons, Ltd., vol. 21(S1), pages 129-150, June.
    9. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    10. repec:dau:papers:123456789/9292 is not listed on IDEAS
    11. Jouni Kuha & John H. Goldthorpe, 2010. "Path analysis for discrete variables: the role of education in social mobility," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 173(2), pages 351-369, April.
    12. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
    13. Mark Wooden & Simon Freidin & Nicole Watson, 2002. "The Household, Income and Labour Dynamics in Australia (HILDA)Survey: Wave 1," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 339-348, September.
    14. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    15. Miles Corak, 2006. "Do Poor Children Become Poor Adults? Lessons from a Cross-Country Comparison of Generational Earnings Mobility," Research on Economic Inequality, in: Dynamics of Inequality and Poverty, pages 143-188, Emerald Group Publishing Limited.
    16. Samuel Bowles & Herbert Gintis, 2002. "The Inheritance of Inequality," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 3-30, Summer.
    17. Hal R. Varian, 2014. "Big Data: New Tricks for Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 3-28, Spring.
    18. Holmlund, Helena, 2006. "Intergenerational Mobility and Assortative Mating. Effects of an Educational Reform," Working Paper Series 4/2006, Stockholm University, Swedish Institute for Social Research.
    19. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    20. Pekkarinen, Tuomas & Uusitalo, Roope & Kerr, Sari, 2009. "School tracking and intergenerational income mobility: Evidence from the Finnish comprehensive school reform," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 965-973, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter Siminski & Sin Hung (Timothy) Yu, 2022. "The Correlation of Wealth Between Parents and Children in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(2), pages 195-214, June.
    2. Gerten Elisa & Beckmann Michael & Bellmann Lutz, 2019. "Controlling Working Crowds: The Impact of Digitalization on Worker Autonomy and Monitoring Across Hierarchical Levels," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(3), pages 441-481, June.
    3. Bubonya, Melisa & Cobb-Clark, Deborah A., 2021. "Pathways of Disadvantage: Unpacking the Intergenerational Correlation in Welfare," Economics of Education Review, Elsevier, vol. 80(C).
    4. Roger Wilkins, 2021. "Economic Wellbeing," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 469-481, December.
    5. Awaworyi Churchill, Sefa & Smyth, Russell & Trinh, Trong-Anh & Yew, Siew Ling, 2022. "Local crime and fertility," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 312-331.
    6. Andrew Leigh, 2021. "Australian Mobility Report Cards: Which Universities Admit the Most Disadvantaged Students?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(3), pages 331-342, September.
    7. Shailesh Rastogi & Akanksha Goel & Adesh Doifode, 2023. "Open APIs in banking and inclusive growth: an innovation to support the poverty eradication programs in India," Journal of Banking Regulation, Palgrave Macmillan, vol. 24(4), pages 432-444, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mendolia, Silvia & Siminski, Peter, 2016. "Does Family Background Affect Earnings through Education? A Generalised Approach to Mediation Analysis," IZA Discussion Papers 9917, Institute of Labor Economics (IZA).
    2. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Salamanca, Nicolás & Zhu, Anna, 2022. "Intergenerational disadvantage: Learning about equal opportunity from social assistance receipt," Labour Economics, Elsevier, vol. 79(C).
    3. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Francesco Bloise & Paolo Brunori & Patrizio Piraino, 2021. "Estimating intergenerational income mobility on sub-optimal data: a machine learning approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(4), pages 643-665, December.
    5. Doruk, Ömer Tuğsal & Pastore, Francesco & Yavuz, Hasan Bilgehan, 2022. "Intergenerational mobility: An assessment for Latin American countries," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 141-157.
    6. Guo, Ningning, 2022. "Hollowing out of opportunity: Automation technology and intergenerational mobility in the United States," Labour Economics, Elsevier, vol. 75(C).
    7. Michelle M. Miller & Frank McIntyre, 2020. "Does Money Matter for Intergenerational Income Transmission?," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 941-970, January.
    8. French, Eric Baird & O’Dea, Cormac & MacCuish, Jamie, 2021. "The Intergenerational Elasticity of Earnings: Exploring the Mechanisms," CEPR Discussion Papers 15975, C.E.P.R. Discussion Papers.
    9. Neidhöfer, Guido & Serrano, Joaquín & Gasparini, Leonardo, 2018. "Educational inequality and intergenerational mobility in Latin America: A new database," Journal of Development Economics, Elsevier, vol. 134(C), pages 329-349.
    10. Bhashkar Mazumder, 2018. "Intergenerational Mobility in the United States: What We Have Learned from the PSID," The ANNALS of the American Academy of Political and Social Science, , vol. 680(1), pages 213-234, November.
    11. Chris Belfield & Claire Crawford & Ellen Greaves & Paul Gregg & Lindsey Macmillan, 2017. "Intergenerational income persistence within families," IFS Working Papers W17/11, Institute for Fiscal Studies.
    12. Brandén, Gunnar, 2019. "Does inequality reduce mobility? The Great Gatsby Curve and its mechanisms," Working Paper Series 2019:20, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    13. Lekfuangfu, Warn N. & Odermatt, Reto, 2022. "All I have to do is dream? The role of aspirations in intergenerational mobility and well-being," European Economic Review, Elsevier, vol. 148(C).
    14. Silvia Mendolia & Peter Siminski, 2016. "New Estimates of Intergenerational Mobility in Australia," The Economic Record, The Economic Society of Australia, vol. 92(298), pages 361-373, September.
    15. Tharcisio Leone, 2019. "The Geography of Intergenerational Mobility: Evidence of Educational Persistence and the “Great Gatsby Curve" in Brazil," Documentos de Trabajo 17526, The Latin American and Caribbean Economic Association (LACEA).
    16. Juan C. Palomino & Gustavo A. Marrero & Juan G. Rodríguez, 2018. "One size doesn’t fit all: a quantile analysis of intergenerational income mobility in the U.S. (1980–2010)," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(3), pages 347-367, September.
    17. Sander Wagner, 2017. "Children of the Reunification: Gendered Effects on Intergenerational Mobility in Germany," Working Papers 2017-03, Center for Research in Economics and Statistics.
    18. Chelsea Murray & Robert Graham Clark & Silvia Mendolia & Peter Siminski, 2018. "Direct Measures of Intergenerational Income Mobility for Australia," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 445-468, December.
    19. Hellier, Joël, 2017. "Stratified higher education,social mobility at the top and efficiency: The case of the French ‘Grandes écoles’," MPRA Paper 76724, University Library of Munich, Germany.
    20. Rasmus Landersø & James J. Heckman, 2017. "The Scandinavian Fantasy: Sources of Intergenerational Mobility in Denmark and the US," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(1), pages 178-230, January.

    More about this item

    Keywords

    Mediation analysis; Intergenerational mobility; Equality of opportunity;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecoedu:v:59:y:2017:i:c:p:1-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/econedurev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.