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The Roles of Education, Skill and Parental Income in Determining Wages

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  • Isaac C. Rischall

Abstract

This study attempts to examine how much of the correlation in incomes across generations can be explained by education and skill. I find two different answers to this question depending on how I instrument for years of schooling. Using quarter of birth and proximity to a local college as instruments, I find high returns to schooling, low returns to skill, and most of the intergenerational mobility coefficient explained. However, these instruments are poorly correlated with years of education. Thus, the estimates are imprecise and potentially biased. Furthermore, using family background variables as instruments, I find the opposite results.

Suggested Citation

  • Isaac C. Rischall, "undated". "The Roles of Education, Skill and Parental Income in Determining Wages," Canadian International Labour Network Working Papers 29, McMaster University.
    • Handle: RePEc:mcm:cilnwp:29
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    File URL: http://socserv.mcmaster.ca/econ/rsrch/papers/CILN/cilnwp29.pdf
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    References listed on IDEAS

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    1. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 7-36, October.
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    6. Griliches, Zvi, 1979. "Sibling Models and Data in Economics: Beginnings of a Survey," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 37-64, October.
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    11. A. Abigail Payne & Aloysius Siow, 1998. "Estimating the Effects of Federal Research Funding on Universities using Alumni Representation on Congressional Appropriations Committees," Working Papers siow-99-02, University of Toronto, Department of Economics.
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    13. Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 253-284.
    14. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    15. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-429, June.
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    17. Isaac C. Rischall, "undated". "The Effect of High School Effort on Future Earnings," Canadian International Labour Network Working Papers 30, McMaster University.
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    Cited by:

    1. Denny, Kevin & Harmon, Colm, 2000. "Education Policy Reform and the Return to Schooling from Instrumental Variables," CEPR Discussion Papers 2518, C.E.P.R. Discussion Papers.
    2. Kevin Denny, 2002. "New methods for comparing literacy across populations: insights from the measurement of poverty," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(3), pages 481-493, October.
    3. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    4. Tamar Khitarishvili, 2010. "Assessing the Returns to Education in Georgia," Economics Working Paper Archive wp_608, Levy Economics Institute.
    5. Isaac C. Rischall, "undated". "The Effect of High School Effort on Future Earnings," Canadian International Labour Network Working Papers 30, McMaster University.

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