The effect of parents' schooling on child's schooling: a nonparametric bounds analysis

A strong positive relation between parents' schooling and child's schooling does not necessarily reect a causal relation. The recent empirical literature has used dierent approaches to identify intergenerational schooling eects and produces contradictory ndings. This paper uses a new approach to investigate the eect of parents' schooling on child's schooling: a nonparametric bounds analysis. By relying on a set of relatively weak and in part testable assumptions, this paper obtains informative bounds on the average causal impact of mother's and father's schooling on the schooling of their child. The tightest bounds, which are obtained using monotone instrumental variables, show that increasing mother's or father's schooling to a college degree has a positive eect on child's schooling which is signicantly dierent from zero, but substantially lower than the OLS estimates.