Parents, Schools And Human Capital Differences Across Countries

This paper studies the contribution of parental influence in accounting for cross-country gaps in human capital achievements. We argue that the cross-country variation in unobserved parental characteristics is at least as important as the one in commonly used observable proxies of parental socioeconomic background. We infer this through an indirect empirical approach, based on the comparison of the school performance of second-generation immigrants. We document that, within the same host country or even the same school, students whose parents come from high-scoring countries in standardized international tests do better than their peers with similar socioeconomic backgrounds. This finding is not driven by differential selection into emigration. We provide several pieces of evidence that support the transmission of cultural values as a leading channel behind the cross-country variation in the parental component. Unobserved parental characteristics account for about 15% of the cross-country variance in test scores, roughly doubling the overall contribution of parental influence.