The effects of parental income on Norwegian adolescents’ school grades

Abstract

Associations between family income and offspring’s educational attainment are well-established. A debated topic is whether this association is due to the causal influence of family income per se, or arises because of other family-related circumstances which correlate with income. This study examines the relationship between parental income and Norwegian adolescents’ school grades, using register data on all 16-year-old graduates from lower secondary schools during 2002–2011. Data are analysed both by conventional ordinary least square regression and by sibling analyses using fixed effect models. The sibling analyses control not only for observed covariates but also for unobserved time-invariant environmental and family-related characteristics, implying that the causal effects of income may be better approximated. The results indicate that generally, variations in parental income in contemporary Norway have modest effects on lower secondary school grades. However, noteworthy income effects are found among the 5% of families with the lowest incomes, suggesting that in these families, lack of income hinders children’s school performance.