Parents influence their children's adult outcomes through economic and genetic endowments, transmission of cultural values and social skills, and through choice of residential location. Using a variance decomposition framework which provides bounds on the effect of families and neighbourhoods,...

The decision to take more education is complex, and is influenced by individual ability, financial constraints, family background, preferences, etc. Such factors, normally unobserved by the researcher, introduce endogeneity and heterogeneity problems into estimating the returns to education. In...