January 24, 2022, 14:00–15:30
Job Market Seminar
High school graduates in Germany who lack parents with college experience are 40 percentage points less likely to attend college than those with college-educated parents, despite the fact that in Germany college is free. This study provides evidence that parental influence explains a significant portion of this socio-economic gap through at least two channels: one, parental pressure and two, the intergenerational transmission of beliefs and preferences. To understand parental influence, I conduct a field experiment with 1,195 students and 819 parents in Germany. Importantly, I experimentally make students’ stated college plans visible to parents. In the first finding, visibility to parents doubles the socio-economic gap in college plans to 27 percentage points. This is mainly driven by a large increase in college plans among students with college-educated parents. To disentangle mechanisms, I collect detailed survey data on students’ and parents’ subjective expectations for various career tracks and estimate a structural model of career choice under uncertainty. Model simulations indicate that 40% of the socio-economic gap in college plans is explained by parental pressure and 44% by students internalizing family-specific beliefs.