Ethnic capital and intergenerational transmission of educational attainment

This paper studies the role of ethnicity in the intergenerational transmission of educational attainment within the framework outlined by Borjas (Quarterly Journal of Economics, 1992, 107(1), 123-150). Relying on heteroskedasticity to identify parameters in the presence of endogenous regressors, I find evidence that the ordinary least squares estimates of the effect of ethnic capital on intergenerational transmission of education are biased upwards due to the transfer of unobserved ability. I also find that, while the role of parental capital has declined over time, ethnic capital has a relatively constant effect on intergenerational transmission of educational attainment.