The Intergenerational Effect of Parental Education in Germany

This study attempts to estimate the causal effect of parental education on child’s education by exploiting the effect of the Second World War on the educational attainment of the parents. Using a 2SLS model the effect of paternal and maternal education on child’s education is estimated. The findings are that the 2SLS estimates are several times larger than the OLS estimates, indicating a positive and significant effect of parental education. However the estimates for maternal education may suffer from a weak instrument problem. The estimates for paternal education are more robust, however the instrumental variable strategy may suffer from validity problems.