eThesis - School of Business electronic theses

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The heritability of education has been documented in numerous studies in different countries. Statistically, children of parents who have more years of education are also themselves more likely to obtain more education. This creates unequal opportunities which are possible inefficiencies in the educational market. The transmission of education from parents to children might work through nature, nurture or the combination of the two. One of the strategies to find out what are the effects of nature and nurture in transmission of education is to study families with adopted children. The objective of this study is to determine what current adoptee studies tell us about the effects of nature and nurture on educational attainment.

The major part of the study is a literature review. Literature review defines the concept of "transmission of education" and introduces the intergenerational regressions used in estimating the degree of heritability of the outcome of interest. The findings of the major adoptee studies which estimate intergenerational regressions are summarized. In addition, the assumptions required for internal and external validity of these studies are discussed.

The empirical part is an estimation of intergenerational regression for education of adopted and non-adopted children. The study replicates some of the results published in Sacerdote (2007).

The reviewed studies find that intergenerational transmission of education is lower for adoptees compared to non-adoptees. With the assumption that the models are correctly specified, the estimates on how much family inheritable endowments contribute to the intergenerational schooling association range from 30 to 80 percent, but the majority of estimates are close to 50 percent. These percentages are inclusive of educational attainment passed through the assortative mating. The estimates obtained in empirical study are very close to estimates published in Sacerdote (2007) for mother's education and indicate positive and statistically significant effect of home environment when estimated for mother's education. At the same time, I find a statistically significant effect of father's education on adoptees' education.

The analysis also shows that the adoptee studies that estimate the intergenerational transmission of education are of limited practical use to policymakers, since their generalizability to general population is questionable and they do not have power to predict the effects of possible policies and interventions.