Beyond human capital: how does parents’ direct influence on their sons’ earnings vary across eight OECD countries?

Abstract

Abstract This article asks to what degree the association between parents’ education and sons’ earnings is mediated by various forms of sons’ human capital across eight large OECD countries. We exploit the OECD Program for the International Assessment of Adult Competencies (PIAAC) database, which provides information on four dimensions of human capital (educational attainment, field of study, cognitive skills, and proxies of non-cognitive skills). We find that the intergenerational transmission process is wholly mediated just by sons’ formal educational attainment in Germany, Norway, and the USA. By contrast, in France, Italy, Spain, Poland, and the UK, a significant residual association remains after we control for all dimensions of sons’ human capital. While we cannot exclude that this residual association is due to unobservable background-related skills sons might have, this also points to family origin factors unrelated to human capital accumulation—such as social ties—that might play a role in the intergenerational transmission of labour market advantages in these countries.