We explore the adoption data approach to estimating causal effects of parental education
and income on the same outcomes of their children. Thanks to a data set drawn from
Swedish population registers with detailed information on biological background and history
of adoptees, we can test basic assumptions that the adoption strategy relies on. We find that
the adoption method survives these tests surprisingly well. Our empirical results suggest that
one more year of either mother’s or father’s education raises children’s education by about
0.1 year. Our estimated income elasticities are around 0.1.
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