Parental education-occupation matching and offspring earnings

ORU models measure the joint impact of the required level of education of the job and the education-occupation matching of the worker on their earnings. This study examines the consequences parental education-occupation for the earnings levels of their offspring. After introduction of this “intergenerational ORU model”, we measure the associations between parental ORU (overeducation, required education, and undereducation) and mid-career earnings among individuals in the United States (NLSY79 data). Results indicate that years of perfect “matched education-occupation” (R) of the parental job increase offspring earnings by 10.3%. Moreover, both years of parental “surplus education” (O) and years of parental “surplus occupation” (U) increase offspring earnings by about 4.0%. Similar to intergenerational mobility models, parental ORU coefficients are moderated by offspring’s own educational attainment yet remain statistically significant. Further analyses, provided in an online supplement, explore gender differences in both generations and replicate the study with UK data (reporting similar results).