School Quality and Family Background in Italy. Discussion Paper Series.

This study investigated whether combined reduction in teacher-student ratios and increase in parental education in Italy between the late 1940s and the late 1980s has significantly impacted the educational attainment and labor market returns of Italians born between 1941-70. Data came from the 1993, 1995, 1998, and 2000 Survey on the Income and Wealth of Italian Households and from aggregate measures of school quality based on the region and cohort of birth. Overall, lower teacher-student ratios positively correlated with higher educational attainment, though overall improvement in parental education had an even stronger impact on attainment. The positive impact of better school quality on educational attainment and returns to education was particularly significant for people in poorer regions and cohorts. Parental education positively affected attainment and negatively affected school returns. Better school quality positively affected returns to education for people with poor family background and negatively affected people born in regions and cohorts with relatively high parental education. Results suggest that better school quality, measured by lower teacher-student ratio, is a technical substitute for parental education in producing individual human capital. When school quality and family background are substitutes, increases in public resources invested in education can help reduce differences related to parental education. (Contains 25 references.) (SM)