Intergenerational Payoffs of Education

Better-educated parents generally have children who are themselves better educated, healthier, wealthier, and better off in almost every way than the children of the less educated. But this simple correlation does not prove that the relationship is causal. Neeraj Kaushal sifts through the evidence from economics and public policy and reviews large national and international studies to conclude that, indeed, education has large intergenerational payoffs in many areas of children’s lives, and that these payoffs persist over time.

Kaushal shows that, if anything, traditional measures of returns to education—which focus on income and productivity—almost certainly underestimate the beneficial effects that parents’ education has on their children. She reports causal positive effects not only on children’s test scores, health, and behavior, but also on mothers’ behaviors that can affect their children’s wellbeing, such as teenage childbearing and substance use. Her findings suggest that, as a component of two-generation programs, helping parents extend their education could go a long way toward reducing inequality across generations and promoting children’s healthy development.

Thus the rationale for two-generation programs that boost parents’ education is compelling. However, Kaushal cautions, the U.S. education system reinforces socioeconomic inequality across generations by spending more money on educating richer children than on educating poorer children. By themselves, then, two-generation programs will not necessarily ameliorate the structural factors that perpetuate inequality in this country.