Year Published: 2003
Author: Sari Pekkala Kerr
Family effects on an individual's labor market success have been studied by economists and sociologists. The consensus is that background matters to educational and labor market performance, but it is not clear how and why. I look at indicators of family background and sibling structure, analyzing their effect on educational attainment and earnings. Parental income, schooling and other characteristics are amongst the main determinants of schooling. Also, sibling structure and density affect education, but have no effect on earnings. Sibling density and sex composition are tested as instruments for schooling. With the IV-strategy, estimated return to schooling decreases from 9 to 7 percent for men, but increases to 11-14 percent for women.