The Economic Attainment of Women: A Comparative Analysis of the Parental Role

Abstract

To our knowledge this assertion about the relative effects of parents, although commonly touted, has never been tested against the economic achievement of females. At times, women have been viewed as having two potential arenas for self-realization: marriage and work. This study provides a framework for estimating the differential impact of a woman's mother and father on the two arenas. Using own earnings and husband's earnings as available (albeit less than ideal) approximations for these two aspects of feminine success, the relative effects of the parents are estimated utilizing data on mature women from the (US) National Longitudinal Survey. We will distinguish the parental contribution to a child's economic success, holding the child's schooling constant, from the contribution, including the indirect effect through schooling. The net contribution will correspond to the parameters of the structural equations below, and the total contribution to the parameters of the reduced form. In models of male economic achievement, the total-versus-net distinction has often been handled through recursive models in which schooling has been assumed predetermined relative to earnings. Unfortunately, this assumption ignores the role played by forgone earnings in an individual's choice of how much schooling to acquire. As pointed out by Becker (1975, pp. 117-120), this may well result in underestimating the contribution of background to earnings and overestimating that of schooling.' In fact, OLS regressions of earnings on schooling and background variables (such as parental education) have often produced negative background coefficients.2 The assumption that schooling is predetermined may bias the estimated coefficients for mother's and father's variables differently, thus undermining a consistent comparison between them. To resolve this bias, we propose to use simultaneous equations methods.