question of whether the degree of intergenerational educational mobility varies across social groups. The coefficients of interaction terms for the marginal groups are negative and significant, whereas for others it is positive and significant. This suggests that the marginal sections of the society (SC/ST/OBC) are more mobile in terms of educational attainment than their counterparts. The last two columns of table 3 report the estimates for the instrumental variable (IV) approach of Lewbel (2012). The two-stage IV specification of Lewbel (2012), represented by equations 4, 5 and 6, can be estimated using the standard two stage least squasres (2SLS) or the generalized method of moments (GMM). In the presence of heteroskedasticity, GMM estimates are considered more efficient than standard 2SLS estimates (Baum et al., 2003). We use the GMM estimation for the results reported in Table 3. The estimates provide strong and positive effect of parental education on their child educational attainment. The IV estimates indicate that a one-year difference in the schooling of fathers result in a difference of 0.60 to 0.80 years in the education level of the child. The difference between the IV and OLS estimates shows that failing to account for the potential endogeneity of the explanatory variables can result in incorrect inference. The nature effects measure the transmission of unobserved ability and genetic endowments, while nurture effect measures the causal effect of parental education on educational attainment. The children’s OLS method captures the effect of nature as well as nurture effect, whereas the IV estimates capture only nurture effect by controlling for unobserved heterogeneity. Thus, after controlling for unobserved heterogeneity, we find very large causal impact of parental education on child’s schooling outcomes, which implies that there is a high degree of intergenerational educational persistence. Intutition suggests that OLS estimates should be biased upwards, since any unobserved omitted variable should have similar relation with the education attainment of child and their
question of whether the degree of intergenerational educational mobility varies across social groups. The coefficients of interaction terms for the marginal groups are negative and significant, whereas for others it is positive and significant. This suggests that the marginal sections of the society (SC/ST/OBC) are more mobile in terms of educational attainment than their counterparts. The last two columns of table 3 report the estimates for the instrumental variable (IV) approach of Lewbel (2012). The two-stage IV specification of Lewbel (2012), represented by equations 4, 5 and 6, can be estimated using the standard two stage least squasres (2SLS) or the generalized method of moments (GMM). In the presence of heteroskedasticity, GMM estimates are considered more efficient than standard 2SLS estimates (Baum et al., 2003). We use the GMM estimation for the results reported in Table 3. The estimates provide strong and positive effect of parental education on their child educational attainment. The IV estimates indicate that a one-year difference in the schooling of fathers result in a difference of 0.60 to 0.80 years in the education level of the child. The difference between the IV and OLS estimates shows that failing to account for the potential endogeneity of the explanatory variables can result in incorrect inference. The nature effects measure the transmission of unobserved ability and genetic endowments, while nurture effect measures the causal effect of parental education on children’s educational attainment. The OLS method captures the effect of nature as well as nurture effect, whereas the IV estimates capture only nurture effect by controlling for unobserved heterogeneity. Thus, after controlling for unobserved heterogeneity, we find very large causal impact of parental education on child’s schooling outcomes, which implies that there is a high degree of intergenerational educational persistence. Intutition suggests that OLS estimates should be biased upwards, since any unobserved omitted variable should have similar relation with the education attainment of child and their
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