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ABSTRACT
Informal institutions are defined as socially shared rules that guide individuals' behaviors outside of officially sanctioned channels. This paper investigates the link between individual educational attainment and education-related informal institutions by examining second-generation immigrants in the USA. I measure the education-related informal institutions by average educational attainment among the adult population conditional on per capita GDP in the second generation's country of ancestry. Empirical analysis shows that given similar family background, market, and institutions, higher average educational attainment in the origin country predicts more years of individual schooling; this relationship is stronger among those with less educated parents. These findings are robust to various methods of controlling for unobserved human capital, alternative sample criteria, and alternative measures of informal institutions (JEL I20, J15, Z10).
Acknowledgments
I am especially thankful to Julie Cullen for her excellent comments. I also thank Eli Berman, Gordon Dahl, Gordon Hanson and John Skrentny for their precious suggestions, as well as Ben Backes and various participants at the UCSD Applied Micro workshop for the helpful discussions. All mistakes are my own.
Disclosure
No potential conflict of interest was reported by the author.
Notes
1. As is standard in ethnic studies (e.g. Borjas Citation1995; Fernandez and Fogli Citation2009), the ethnic origin of a second-generation immigrant is determined by the father's birthplace (unless only the mother is foreign-born, in which case it is determined by the mother's birthplace). In the analysis, I constrain the sample to individuals with foreign-born fathers. The estimates would not be affected if I run the same regressions on a sample including second-generation individuals whose father is native-born and his/her national origin is hereby assigned by the mother's birthplace.
2. Only 0.52% of the CPS sample aged 30–54 have at least one parent's information missing and are thus excluded from the sample.
3. Since the CPS collects educational attainment in categories, I have mapped it into years of schooling according to Park (Citation1996) and take the midpoint of each interval.
4. Age at immigration reflects immigrants' acquisition of differing compositions of foreign and domestic human capital, which may not be comparable (Friedberg Citation2000). It also indicates immigrants' level of assimilation to the US society, as individuals who migrated at an early age are presumably better assimilated.
5. Although household income is available in census data, the level reported is for the survey period but not necessarily the period when children are brought up by the interviewees. As income is relatively volatile but occupation is more stable, I use the occupational income score, which is a constructed variable that assigns a value representing the median total income (in hundreds of 1950 dollars) of all persons with that particular occupation in 1950, instead of household income.
6. The estimated group mean level is obtained by regressing the variable of interest on age, female, a year-of-survey dummy and a full set of national origin dummies.
7. The variables of years of schooling of the respondents and their parents are top-coded at 20.
8. There are 10 categories for the regions at age of 16: New England, Middle Atlantic, East North Central, West North Central, South Atlantic, East South Central, West South Central, Mountain, Pacific, and foreign.
9. Data details are discussed in the appendix.
10. Due to data limitation, the income inequality measure is aggregate at the origin level. More details are discussed in the appendix.
11. Five source regions are considered: (1) Latin America and the Caribbean; (2) Middle East and North Africa (Arab Nations); (3) East and South Asia; (4) Western Europe, Scandinavia, Canada, and Australia, etc. (Western Countries); and (5) Eastern Europe. Western countries are used as the baseline.
12. Data of GDP per equivalent adult are obtained from Penn World Table 7.0. GDP per equivalent adult is adjusted for purchasing power parity and measured in the 2005 international dollar.
13. I replace the per capita GDP with GDP per equivalent adult in all the following regressions. Estimation results are very similar and available upon request.
14. Given the small set of source countries, the robust errors are clustered at the origin level and adjusted by jackknife (Cameron and Miller Citation2015).
15. More details about the data are discussed in the appendix.
16. Both immigrants and native-born Americans were included.
17. The Geary—Khamis dollar is a hypothetical unit of currency that has the same purchasing power that the US dollar had in the USA at a given point in time (1990). It was proposed by Roy C. Geary in 1958 and developed by Salem Hanna Khamis in 1970–1972.