Inter-generational Transmission Of Education: Empirical Evidence Based On Household Production Theory

Based on baseline data of China Education Panel Survey (2013-2014), this thesis investigates the effect of parents' education on children's educational outcome from the perspective of Household Production Theory, in order to analyze the degree,heterogeneity, mechanism of intergenerational transmission of education.The thesis uses the microcosmic data of a large-scale basic survey, and regards China's compulsory education policy which is a natural experiment occurred in 1986 as instrument variable of parent's education to do empirical analysis. It evaluates the intergenerational transmission of education which means the effect of parent's education level to children's education outcome by using the two stage least square. The paper contributes to the professional community in the following way: the author tests the causal relationship between parent's education attainment and children's educational outcome by using Chinese data, the paper also convincing evidence of heterogenous impact of education transmission for families of different background.Using CEPS data, this study finds that the OLS estimation underestimates the effect of parent's education on children's educational outcome, which means underrating of the intergenerational transmission of education. Mothers who accomplish compulsory education have significant effect on children's educational outcome. Fathers who accomplish compulsory education have significant impact on children's educational outcome, but fathers' years of schooling have. The effect of parents finishing compulsory education is heterogeneous that children from city and girls are affected more and the effect of the mothers' education is larger. The intergenerational transmission works through improving parent's culture capital, earnings and social capital.The policy implication of this study is that the government should target more on pupils from disadvantaged families. After identifying individuals in need, the government should pay special attention to females in the less-educated families, and children in low education category in urban as well.