Does family background affect earnings through education? : a generalised approach to mediation analysis

Silvia Mendolia (University of Wollongong and IZA), Peter Siminski (University of Wollongong and IZA)

We seek to quantify the role of education as a mechanism through which family background affects earnings. To this end, we propose a generalisation of statistical 'mediation analysis'. In our approach, the treatment and mediator can be multidimensional. This allows us to directly and flexibly account for a range of background characteristics which affect child earnings through the pathway of education and through other mechanisms. The results suggest that educational attainment explains 24%-39% of the overall family background effect on earnings in Australia. The mediating role of education seems to be larger for Australia than for the UK.

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Year of publication:	April 2016
Authors:	Mendolia, Silvia ; Siminski, Peter
Publisher:	Bonn, Germany : IZA
Subject:	mediation analysis \| intergenerational mobility \| equality of opportunity \| Soziale Mobilität \| Social mobility \| Bildungschancen \| Equality of opportunity in education \| Generationengerechtigkeit \| Intergenerational equity \| Einkommensverteilung \| Income distribution \| Mediation \| Familiensoziologie \| Sociology of the family \| Einkommen \| Income \| Intergenerationenmobilität \| Intergenerational mobility \| Bildungsniveau \| Educational achievement