University of Southern California
Children born to richer parents and in richer neighborhoods are more likely to achieve economic success in life. Education is considered by many to be a way to “level the playing field” and to ensure that all kids have the same opportunities for success. This paper investigates whether education weakens the relationship between early-life disadvantages and later-life SES. We use three proxies for disadvantage, including a genetic proxy, that are strongly associated with SES. Identification comes from a compulsory schooling reform that generated exogenous variation in schooling in the UK. While the reform reduced educational disparities, it did not weaken the relationship between early disadvantages and wages because advantaged children had higher returns to schooling. We exploit random within-siblings genetic variation to show that these higher returns were due to advantageous environmental circumstances rather than due to individual genetically-driven characteristics. Our findings indicate that compulsory schooling policies may have limited effectiveness in increasing intergenerational mobility. However, our results also point to the importance of early-life environmental circumstances, suggesting a potential role for other educational or social policies.