Property confiscation and the intergenerational transmission of education in post-1948 Eastern Europe

Using regression methods and propensity score matching applied to two different retrospective samples, this study finds evidence of a positive “property confiscation” effect on educational attainment. We use a 1993 survey of adults (aged 20–69) in the post-transition Eastern European countries of Bulgaria, the Czech Republic, Hungary, Poland and Slovakia. In countries experiencing the most private property losses, regression results indicate that years of schooling increase by about 0.19 for each member of an affected extended family (parents, maternal grandfathers, or paternal grandfathers). When all three sets of family members lost property, we find an increase in years of educational attainment of about 0.6. We also find an increase in the probability of post-high school education of about 0.02 for each extended family member whose property was confiscated. Those findings are confirmed using propensity score matching, which provides a larger and more pervasive positive confiscation effect. We also test our hypothesis using current and retrospective microeconomic panel data from Europe’s Survey of Health, Aging and Retirement (SHARE), a dataset that covers countries in Eastern and Western Europe. We again find that property confiscation leads to greater educational attainment in the children of the affected households. We apply propensity score matching to the data and find, again, positive and statistically significant evidence of a confiscation effect on years of educational attainment. Auxiliary work indicates a separate channel for property confiscation’s effects. Our explanation for the empirical results reported herein can be found in families’ ability to pay bribes to advance their children’s education.