“…In the short term, children's schooling has a modest direct impact (β=.27) on their cognitive ability, but in the long-term, when the children become parents, their educational background will result in a large total effect (β=.55) on the ability of the next generation, indirectly through the effects of fertility, household income, and children's schooling, as we have found in this study. Our study corroborates evidence that intergenerational transmission of human capital is more likely to occur through a stimulating environment provided by well-educated parents (Björklund, Lindahl, & Plug, 2006;Johnson et al, 2007;Sacerdote, 2002;Umek, Podlesek, & Fekonja, 2005). Therefore, as the basis of societal progress across generations, we suggest that formal education should not merely focus on attracting children to stay longer in school through an old-fashioned examination-oriented education system.…”