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Ability, Parental Valuation of Education, and the High School Dropout Decision

Ability, Parental Valuation of Education, and the High School Dropout Decision Kelly Foley Giovanni Gallipoli David A. Green Foley, Gallipoli, and Green abstract The probability of dropping out of high school varies considerably with parental education. Using a rich Canadian panel data set, we examine the channels determining this socioeconomic status effect. We estimate an extended version of Carneiro, Hansen and Heckman (2003)'s factor model, incorporating effects from cognitive and noncognitive ability and parental valuation of education (PVE). We find that cognitive ability and PVE have substantial impacts on dropping out and that parental education has little direct effect on dropping out after controlling for these factors. Our results confirm the importance of determinants of ability by age 15 but also indicate an important role for PVE during teenage years. I. Introduction In this paper we investigate the forces determining the high school dropout decision using a rich panel data set that includes survey responses from children, parents, and high school administrators. Following recent work by Heckman, Stixrud, and Urzua (2006); Cunha and Heckman (2007, 2008); and Cunha, Heckman, and Schennach (2010)--hereafter, HSU, CH07, CH08, and CHS, respectively--we use a factor based model to capture the effects of pre-high school skill investments as reflected in cognitive and noncognitive ability http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

Ability, Parental Valuation of Education, and the High School Dropout Decision

Journal of Human Resources , Volume 49 (4) – Nov 5, 2014

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Publisher
University of Wisconsin Press
Copyright
©by the Board of Regents of the University of Wisconsin System
ISSN
1548-8004
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Abstract

Kelly Foley Giovanni Gallipoli David A. Green Foley, Gallipoli, and Green abstract The probability of dropping out of high school varies considerably with parental education. Using a rich Canadian panel data set, we examine the channels determining this socioeconomic status effect. We estimate an extended version of Carneiro, Hansen and Heckman (2003)'s factor model, incorporating effects from cognitive and noncognitive ability and parental valuation of education (PVE). We find that cognitive ability and PVE have substantial impacts on dropping out and that parental education has little direct effect on dropping out after controlling for these factors. Our results confirm the importance of determinants of ability by age 15 but also indicate an important role for PVE during teenage years. I. Introduction In this paper we investigate the forces determining the high school dropout decision using a rich panel data set that includes survey responses from children, parents, and high school administrators. Following recent work by Heckman, Stixrud, and Urzua (2006); Cunha and Heckman (2007, 2008); and Cunha, Heckman, and Schennach (2010)--hereafter, HSU, CH07, CH08, and CHS, respectively--we use a factor based model to capture the effects of pre-high school skill investments as reflected in cognitive and noncognitive ability

Journal

Journal of Human ResourcesUniversity of Wisconsin Press

Published: Nov 5, 2014

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