"Education and Intergenerational Mobility: Evidence from a Natural Experiment to Puerto Rico"

John C Bludeorn
Dept of Economics, University of Oxford, Oxford

and

Elizabeth U. Cascio
University of California, Davis and NBER

 
Abstract:  The existence of intergenerational spillovers to public investments in 
schooling is often assumed in policy discussions regarding economic development. 
However, few studies to date have forwarded convincing evidence that externalities 
exist for developing countries. In this paper, we address this issue using the 
arguably exogenous schooling consequences of a major hurricane strike on Puerto Rico
in the 1950s. Using data from the US. Census of Population for Puerto Rico, we first
find that individuals on to margin of school entry at the time of the storm and 
residing in the most exposed regions of the island had significantly lower levels 
of education as adults than their counterparts in less exposed regions. Using the 
interaction of wind speed and age at the time of the storm as an instrument, we then 
find that maternal education is related to the probability that a child speaks English.
Our estimates imply an additional year of education raise the probability that a child
speaks English by between 4.3 and 4.5 percentage points, c approximately 24 to 28 percent.
We find no conclusive evidence that parental education increases the probability that a 
child is enrolled, literate, or in an age-appropriate grad, On balance, these findings 
suggest that education is responsible at least in part for the persistence of human 
capital across generations.

Keywords: education, intergenerational mobility, natural experiment, hurricane 
JEL: 120, J62