What does this research mean for the field?

An exogenous one-year increase in parents' schooling raises children's lifetime earnings by 2% on average, even though the observed intergenerational schooling correlation is largely driven by correlated unobserved preferences. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

To isolate and evaluate the causal impact of parental schooling on children's lifetime earnings by separating causal effects from correlated unobserved preferences.

September 2, 2026International Economic ReviewOpen Access

The Causal Effect of Parents' Education on Children's Earnings

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Authors

SLSang Yoon Lee NRNicolas Roys ASAnanth Seshadri

Discussion

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Overview

Structural modeling study shows that an exogenous one-year increase in parental education raises offspring lifetime earnings by 2%, highlighting direct intergenerational economic benefits.

Key Points

To isolate and evaluate the causal impact of parental schooling on children's lifetime earnings by separating causal effects from correlated unobserved preferences.
Formulated and estimated an econometric model of endogenous schooling decisions and lifetime earnings.
Identified causal effects using earnings variations among offspring with identical schooling levels whose parents attained differing levels of education.
Calibrated and evaluated the model using longitudinal microdata from the Health and Retirement Study.
An exogenous one-year increase in parental schooling increases children's lifetime earnings by an average of 2%.
The observed intergenerational correlation in schooling is largely driven by correlated unobserved preferences for education between parents and children.
A slightly negative structural relationship exists between parental education and children's independent schooling choices, partially offsetting preference correlations.

Cite This Study

Lee et al. (2026) studied this question.

synapsesocial.com/papers/6a97e20ec562ede874ec60b0 https://doi.org/10.1111/iere.70105

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September 2, 2026International Economic ReviewOpen Access

The Causal Effect of Parents' Education on Children's Earnings

View Full Paper

Ask AI

Bookmark

Authors

SLSang Yoon Lee NRNicolas Roys ASAnanth Seshadri

Discussion

Member takes

Overview

Structural modeling study shows that an exogenous one-year increase in parental education raises offspring lifetime earnings by 2%, highlighting direct intergenerational economic benefits.

Key Points

To isolate and evaluate the causal impact of parental schooling on children's lifetime earnings by separating causal effects from correlated unobserved preferences.
Formulated and estimated an econometric model of endogenous schooling decisions and lifetime earnings.
Identified causal effects using earnings variations among offspring with identical schooling levels whose parents attained differing levels of education.
Calibrated and evaluated the model using longitudinal microdata from the Health and Retirement Study.
An exogenous one-year increase in parental schooling increases children's lifetime earnings by an average of 2%.
The observed intergenerational correlation in schooling is largely driven by correlated unobserved preferences for education between parents and children.
A slightly negative structural relationship exists between parental education and children's independent schooling choices, partially offsetting preference correlations.

Cite This Study

Lee et al. (2026) studied this question.

synapsesocial.com/papers/6a97e20ec562ede874ec60b0 https://doi.org/10.1111/iere.70105

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