Overview

Abstract (English)

The probability of dropping out of high school varies considerably with parental education. Using a rich Canadian panel dataset, we examine the channels determining this socio-economic status effect. We estimate an extended version of Carneiro, Hansen and Heckman (2003) factor model, incorporating effects from cognitive and non-cognitive ability, and parental valuation of education (PVE). We find that cognitive ability and PVE have substantial impacts on dropping-out and that parental education has no direct effect on dropping-out after controlling for these factors. Our results confirm the importance of determinants of ability by age 15 but also indicate an important role for PVE during teenage years.

Abstract (French)

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