The e ect 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 re ect a causal relation. The recent empirical literature has used di erent approaches to identify intergenerational schooling e ects and produces contradictory ndings. This paper uses a new approach to investigate the e ect 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 e ect on child's schooling which is signi cantly di erent from zero, but substantially lower than the OLS estimates.