Intergenerational transmission of education: Unraveling the roles of human capital, cultural capital and financial capital

Intergenerational transmission of education has been one of the key topics in stratification research for decades. After all, the association between parents’ and offspring’s educational attainment reflects the degree of social mobility and consequently sheds light on inequality of educational opportunities (IEO). The mechanism underlying the role of parental education is threefold. On the one hand, parental education is a proxy for human capital. We define human capital as the ability to use and understand (new) information, i.e. key information-processing skills, which is crucial to be successful in education. It is likely that part of the intergenerational transmission of education is essentially a transmission of such key skills. On the other hand, parental education also captures cultural capital. Children from high educated parents internalize positive attitudes towards learning, reading and other school-related practices and learn through their parents how to navigate in education. Thirdly, parental education affects financial outcomes that can be considered as another driver of educational outcomes. With the possession of financial capital, a stimulating learning environment can be created in terms of learning equipment or extra tuition. Human capital, cultural capital and financial capital are intertwined and mutually dependent. This means that in analyzing the intergenerational transmission of these parental resources, we need to consider both direct and potential indirect effects on the educational success of their offspring.
The aim of this paper is to disentangle the underlying drivers of intergenerational educational transmission. Contrary to previous studies, our paper includes direct or indirect measures of human capital, cultural capital and financial capital. This allows us to simultaneously look at direct and indirect effects of the parental resources on the child’s skills and educational outcomes. Not only can we look at the intergenerational transmission of parental capital, we also have data on educational attainment of grandparents. We thus contribute to existing research in this field by unraveling the roles of the different forms of capital in the intergenerational transmission of education for three generations.
We use a unique dataset including detailed information on the educational careers, key-information processing skills and socio-economic background of multiple generations (about 20,000 observations). Using Structural Equation Modeling (SEM), we show that the main mechanism in the intergenerational transmission of education, is the transmission of skills between parents and offspring. The mediating role of financial capital and cultural capital is much more modest. We find no strong evidence for intergenerational transmission of non-cognitive skills. The direct effects of grandparents’ education are small, but still consistently related to grandchild’s skills and educational outcomes.