Ethnic Intergenerational Transmission of Human Capital in Sweden

Abstract: The thesis examines the intergenerational transmission of three outcome variables between different ethnic groups of first and second generation immigrants in Sweden. The outcome variables studied are income, education and employment. Aggregated data is used to study the differences in the outcome variables between groups. Significant for all the outcome variables is a high level of transmission from the first generation immigrants to the second generation immigrants. As much as 56 percent of the difference in income between different ethnic groups is shown to be transmitted to the next generation. The estimated results also show that the groups of first generation immigrants on average suffer a significant disadvantage in both income and the rate of employment compared to the native Swedes. Because of the high intergenerational transmission of human capital these disadvantages persist also among the groups of second generation immigrants. When examining education as outcome variable the picture is different. The groups of first generation immigrants on average have an educational advantage compared to the native Swedes. A lower ethnic intergenerational transmission makes much of this advantage disappear in the groups of second generation immigrants.