Effects of Parental Disability on Children's Schooling: The Surprising Role of Parental Education

Abstract

We show that negative effects of parental disability on schooling investments are larger for economically advantaged families. Among children with a veteran father, private school attendance declines with the severity of a father's service-related disability by more when fathers have completed college relative to when fathers have not. Paternal disability also lowers the mobility of young adults, suggesting that reduced educational investment persists into young adulthood. Lost earnings are one mechanism; disability decreases labor supply for all, but foregone earnings are larger for highly educated fathers. Losses are offset by Veterans Affairs transfers for less educated fathers but not for educated fathers.