Heterogeneous Grandparent Effects: The Effect of Grandparents' Education on Grandchildren's Education in One-Parent and Two-Parent Families

PWP-CCPR-2016-001

Abstract

This study examines the direct effect of grandparents’ education on grandchildren’s education and variations in the effect across different types of family structures for African Americans and whites in the United States. In particular, I test the “Markovian” assumption in intergenerational mobility theories, which argues that grandparents’ influences on grandchildren are all mediated by parents. Relying on a counterfactual causal framework and multigenerational data from the Panel Study of Income Dynamics, this study provides a causal interpretation for the direct effect of grandparents on grandchildren. My results confirm a non-Markovian mechanism—namely, a positive direct effect of grandparents—for both racial groups. On average, grandparents’ education has a greater effect on grandchildren’s education in white families than in African American families. However, such a comparison obscures substantial heterogeneity associated with race and family structure: The grandparent effect is particularly strong among African American families in which grandchildren grew up in two-parent households, whereas it is largely homogeneous among different types of white families. The results suggest that the decline in two-parent households has undermined multigenerational transmission of educational status for African Americans, but has had little impact on whites.