Beyond human capital: how does parents’ direct influence on their sons’ earnings vary across eight OECD countries?

Abstract

This article asks to what degree the association between parents’ education and sons’ earnings is mediated by various forms of sons’ human capital across eight large OECD countries. We exploit the OECD Program for the International Assessment of Adult Competencies (PIAAC) database, which provides information on four dimensions of human capital (educational attainment, field of study, cognitive skills, and proxies of non-cognitive skills). We find that the intergenerational transmission process is wholly mediated just by sons’ formal educational attainment in Germany, Norway, and the USA. By contrast, in France, Italy, Spain, Poland, and the UK, a significant residual association remains after we control for all dimensions of sons’ human capital. While we cannot exclude that this residual association is due to unobservable background-related skills sons might have, this also points to family origin factors unrelated to human capital accumulation—such as social ties—that might play a role in the intergenerational transmission of labour market advantages in these countries.

How the genetics of cognitive and non-cognitive skills influence intergenerational social mobility

“…Factors besides social origins also influence a person's attainments and socio-economic status in adulthood, which may include individual cognitive and non-cognitive skills (e.g. Esping-Andersen & Cimentada 2018;Bonomi Bezzo et al, 2023). Because the development of skills is influenced by children's environment, such as the quality of the school, they may partly mediate the effect of parental background on social destination.…”

Taxing reproduction: the full transfer cost of rearing children in Europe

“…Estimating the comparative rates of return of the various forms of private and public transfers is beyond the scope of this study. Higher levels of private investment by better-off parents in their offspring are also likely to lower intergenerational mobility in society, a topic we cannot address here [ 20 , 21 ]. Instead, we perform a descriptive accounting exercise that does not consider the behavioural responses of the actors and sidesteps theoretical concerns about whether or not the utility derived from childrearing sufficiently compensates parents for their expenses.…”