Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Bergen, Department of Economics
No 03/07: Family income and children's education: Using the Norwegian oil boom as a natural experiment.
Katrine Vellesen Løken ()
Additional contact information
Katrine Vellesen Løken: University of Bergen, Department of Economics, Postal: Hermann Fossgt. 6, N-5007 Bergen, Norway
Abstract: Parental income is positively correlated with children?s educational attainment. This paper addresses the causality of this observed link. We have a unique data set for Norwegians born in the period from 1968-1973, with a measure of permanent family income from the children are 0-20 years old. This enables us to look at the long term e¤ect of family income on children's educational attainment. The Norwegian oil shock in the 1970s and 1980s is used as an instrument, since this - in some regions, but not in others - implied a general increase in income that was unrelated to education. This variation in income is used to estimate the causal e¤ect of family income on children's educational attainment. We find no causal relationship between family in- come and children's educational attainment. This result is robust to different specification tests.
Keywords: Mobility; Instrumental Variables; Income and Education
32 pages, January 24, 2007
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