Working Paper 2011-234
Education is a main player in social mobility, however, it remains unclear through which channel the high observed intergenerational correlations of educational attainment are produced. The literature proposed very different mechanisms that could drive these correlations. This paper uses a structural equation model and data from Mexico to estimate the relative importance of the main channels simultaneously. The results sustain all of the most commonly proposed mechanisms and underline the importance to look at them simultaneously. The economic situation of a family has a large direct effect on children’s schooling attainment, even when controlling for all other possible channels. Parental education has direct and indirect effects through the economic situation. Together, these two findings clearly reject the hypothesis that the educational correlations are only the fruit of a transmission of ability from one generation to the next and sustaining the idea that some inequality of opportunity is present.