Unobserved Heterogeneity, Demographic Mechanisms, and the Intergenerational Effects of Increasing Women’s Schooling

Vida Maralani, University of Pennsylvania
Robert D. Mare, University of California, Los Angeles

Measuring the intergenerational effects of increases in women’s schooling is complicated by the fact that the processes that create generations, such as marriage and childbearing, are endogenous to women’s schooling. Previously we developed an approach to assessing intergenerational effects that included these endogenous demographic mechanisms using a formal model of population projection. Here we extend that work by examining how unobserved heterogeneity affects intergenerational processes. First, we estimate joint models of fertility and children’s schooling. Second, we test the population level effects of increased childlessness, which might occur if certain types of women forgo fertility altogether. Third, we show that even if endowments and marriage sorting processes explain all of the direct effect of women’s schooling on children’s schooling, the intergenerational effects of increasing women’s schooling are usually not zero because of effects that accrue through demographic mechanisms and population level processes. We compare results by race and birth cohort.