Evolving Inequality of School Attainment in Sri Lanka

Disparities in school outcomes are an important source of income inequality, especially in rapidly developing and developed economies where the returns to schooling have been increasing. It is therefore important to document and understand the sources of schooling inequality. The intergenerational transmission of schooling is an important reason for the persistence of schooling disparities over time. More-educated parents are much more likely than less-educated parents to invest in the schooling of their children owing to different preferences, better financial circumstances, and their own greater human capital. In this paper, authors explore whether the association between parental and child schooling has strengthened or weakened over time. Authors find strong, but declining, effects of parental schooling on (male and female) child schooling over time, even after controlling for other variables. The improved distribution of schooling will have likely played an important role in improving the distribution of income in the country had there not been other compensating changes