The Effect of Parental Background on Track Choices and Wages

Intergenerational links are often investigated by computing educational attainment correlations between parents and children, even though parental background may influence outcomes at earlier stages of the educational path. Because of early school track selection and widespread vocational training, this effect may be quite important in the Swiss context. We first investigate the importance of parental background variables for upper secondary educational attainment over the last 6 decades. We next estimate the impact of parental background on earnings. This effect is shown to depend on the magnitude of intergenerational correlations, the returns to qualifications and the availability of further training for those having ended up in a low educational track at age 15. The impact of tracking at age 15 on wage inequality is found to be relatively small in Switzerland, comparing to results for Germany. Relatively low returns from academic education best explain this pattern.