Sibling Similarity in High School Graduation Outcomes: Causal Interdependency or Unobserved Heterogeneity?

• Author: Oettinger, Gerald S.

Gerald S. Oettinger [*]

This paper uses data on age-adjacent sibling pairs from the National Longitudinal Survey of Youth to test for causal interdependencies between the high school graduation outcomes of older and younger siblings. Even after controlling for observable background characteristics, the graduation probability of an individual whose sibling graduated from high school exceeds the graduation probability of an individual whose sibling did not graduate by a large amount. However, this difference does not measure the causal effect of sibling graduation because of unobserved family factors and genuine simultaneity in the determination of all siblings' graduation outcomes. To measure the causal effect of sibling achievement on own achievement, I specify models in which sibling achievement is endogenous and estimate these models by two-stage methods using sibling-specific background characteristics as instruments. The evidence indicates that older sibling achievement has a positive causal effect on younger sibling achievement but that younger sibling achievement has no significant influence on older sibling achievement. These results are consistent with a model of intrafamily allocation in which parents learn about child endowments sequentially.

1. Introduction

   There is widespread agreement among both social scientists and the public at large that the family plays a crucial role in influencing the development and eventual achievement of children. Less clear, however, is the relative importance of the many different contributions of parents and family to child outcomes. Although the effect of parental socioeconomic status on child outcomes probably has received the most study, research in several disciplines suggests that the size, composition, and behavior of the family unit are likely to be important determinants of child outcomes as well.

   In the psychology literature, for example, an influential paper by Zajonc (1976) argues that siblings from the same household develop in predictably different ways because differences in birth order and age spacing imply that each sibling grows up in a distinct intellectual environment within the household. From a behavioral genetics perspective, Dunn and Plomin (1990) conclude that nonshared environment accounts for a large fraction of the sizable variation in personality and intelligence between siblings, and they argue that both parent-child interactions and sibling interactions have important child-specific effects that probably contribute heavily to nonshared environment. Finally, economic models of intrafamily allocation (Becker 1981; Behrman, Pollak, and Taubman 1982) show that parental investments in children's human capital, and therefore child outcomes, are likely to depend critically on family size, child endowments, and parental preferences regarding inequality among their children.

   Previous research has examined how child achievement is influenced by family size (Blake 1989; Hanushek 1992), birth order (Behrman and Taubman 1986; Kessler 1991), and sex composition of the sibship (Butcher and Case 1994; Kaestner 1997; Hauser and Kuo 1998). However, there has been almost no analysis of whether the achievement of siblings influences a child's own achievement, despite the plausibility and potential policy relevance of such a relationship. Some evidence on this question is reported by Hanushek (1992), who finds that having higher achieving siblings raises a child's own achievement, but Hanushek treats sibling achievement as exogenous in his analysis.

   The limited investigation of sibling achievement effects is perhaps somewhat surprising when one considers that several recent papers (Datcher 1982; Jencks and Mayer 1990; Case and Katz 1991; Corcoran, et. al. 1992; Evans, Oates, and Schwab 1992; Zax and Rees 1998) have examined how the average socioeconomic status of the individuals in a youth's neighborhood or school affects youth achievement. Robust evidence for neighborhood or school effects has been elusive, perhaps because average socioeconomic status in these broadly defined groups is a very noisy proxy for the socioeconomic status of the youth's actual peer group). [1] Given the potential biases inherent in using overly broad peer group measures, an analysis of the effect of siblings, who constitute a very narrow and intimate peer group, would seem to have some appeal. [2]

   The present paper pursues this line of inquiry, analyzing whether sibling high school graduation outcomes have a causal effect on a youth's own probability of high school graduation. Such a causal linkage might exist for several reasons. For example, the achievement of siblings might have spillover effects if learning is to some extent a public good within the family unit. Second, the achievement of siblings might have a "role model effect," either by revealing information about a youth's own potential (and therefore affecting own effort) or through other mechanisms. Finally, the achievement of siblings might influence a youth's own outcome if parental investment in children's human capital tends either to offset or to reinforce ability or achievement differences across siblings. Of course, since the behavior of the family unit simultaneously influences the achievement of all of the children in the family and since many family factors are unobservable to the econometrician, a sibling's achievement should be treated as an endogenous explanatory variable in any econometric model of youth achievement.

   Briefly summarizing the empirical results, I find that the raw probability of high school graduation is 42 percentage points higher for youths whose sibling in the sample graduated from high school than for youths with a nongraduating sibling in the sample and controlling for observable family-specific and individual-specific characteristics reduces this "effect" of sibling graduation by only about a third. However, estimates that recognize the endogeneity of the sibling graduation outcome are quite different. In particular, the estimated effect of older sibling graduation on the younger sibling's graduation probability is reduced but remains positive, substantial, and (marginally) significant. In contrast, the estimated effect of younger sibling graduation on the older sibling's graduation probability falls much further and is not significantly different from zero. Thus, the estimates suggest that older sibling achievement exerts a significant influence on, but is not substantially influenced by, younger si bling achievement. This asymmetric pattern of sibling achievement effects can be explained by several models of family behavior.

   The remainder of the paper proceeds as follows. Section 2 describes the data used in the empirical analysis. Section 3 lays out the econometric model and describes strategies for estimating the causal effect of sibling achievement on own achievement. Section 4 presents the empirical results. Finally, section 5 contains a concluding discussion.

2. Data

   The empirical analysis is performed using a sample of sibling pairs from the National Longitudinal Survey of Youth (NLSY). The NLSY began in 1979 as a survey of 12,686 American youths who were between the ages of 14 and 21 as of January 1, 1979. By design, the NLSY oversampled minority youths and youths from poorer socioeconomic backgrounds. Interviews have been performed annually since 1979. Extensive family background data were collected at the initial interview and detailed individual histories of educational attainment, labor market outcomes, and family formation have been compiled over time.

   An important feature of the NLSY for the current analysis, which requires data on multiple siblings from each family, is that it includes all youths born between 1957 and 1964 in the original set of randomly selected households. This household-based sample design produced an initial sample containing 5863 siblings drawn from 2448 distinct households with multiple sibling respondents. Approximately 70% of these multiple-sibling respondent households contain exactly two sibling respondents; the remaining households contain three or more sibling respondents.

   The sample that I use in the empirical work consists of a set of pairs of NLSY sibling respondents, with at most one pair per household. Because most of the NLSY households with multiple sibling respondents have only two sibling respondents, the choice of sibling pair is usually trivial. For households with three or more sibling respondents, however, I include only the oldest pair of respondent siblings. Although using data on every sibling respondent from each NLSY household would increase the sample size somewhat, it would require a substantial complication in the econometric model since one would have to allow for many more potential causal linkages between siblings. Consequently, I limit the sample to just the oldest pair of sibling respondents from each household. Note that the included sibling pairs are not necessarily the two oldest siblings in each family, but are rather the two oldest siblings who were surveyed by the NLSY. I further limit the sample to sibling pairs with complete data on high schoo l graduation outcomes and certain basic background characteristics (e.g., race, sex, birth order, sibship size, etc.), which reduces the sample to its final size of 2255 sibling pairs.

   Table 1 presents (unweighted) sample means, standard deviations, and sibling correlations for the variables used in the empirical analysis. [3] Panel A summarizes the data for the outcome analyzed in this study--graduation from high school at or before age 19. The probability of graduation at or before age 19 is almost 0.75 for both older and younger siblings and graduation outcomes are strongly positively correlated between siblings. [4] Implicit in the means and correlation of sibling graduation outcomes is a contingency table describing the probability (empirical...