This chapter contributes to a growing literature on the determinants of education choices. Since Becker (1964) and other economists have introduced the concept of human capital into economics there exists a plenty of studies that examine the eco- nomics of education. Freeman (1986) provides an overview of early theoretical and empirical studies. Black and Devereux (2011) discuss the results on causality con- cerning educational achievements. However, to the best of our knowledge, we are the first to emphasize that parents in areas distant from universities may have an in- centive to make inferior schooling track choices to keep their children geographically close during their adult life. This result is in line with earlier descriptive evidence suggesting that, in rural Bavarian areas, 34 % of girls and 24 % of boys in primary school who qualify to attend an academic secondary school track do not pursue this option, compared to only 18 % of girls in urban areas (see Theile (2007)).
Data from the statistical agency of Baden-Württemberg shows similar results; as in Bavaria, pupils are given a secondary school track recommendation at the end of primary school in Baden-Württemberg. Limiting the survey to pupils who qualify for the academic secondary school track, this analysis indicates that the percentage of children actually attending academic secondary schools varies across counties. Three out of four children in rural areas attend secondary academic schools, given an equivalent recommendation. In larger towns and cities, nine out of ten pupils do so.1 Using data from the German PISA 2000 extension study, Jürges and Schneider (2011) find that although girls in general perform better in school than do boys, this gender effect decreases in grade 5 because ”more girls than boys are sent to tracks below the one recommended” (p. 387).
1This information is based on data from the ”Bildungsstatistik Baden-Württemberg”. We are
thankful to Dr. Rainer Wolf of the Statistical Agency Baden-Württemberg who made these data available for us. A national survey of secondary school track choices is not available in Germany because schooling policies differ across states and because the statistical agencies of the states are responsible for monitoring the educational systems.
36 2. Strategic Education Choices and Parents’ Wish to Keep Children Close
One further strand of literature, that has received considerable attention in the field of economics, deals with strategic behaviour within families. The focus of parents’ strategic behaviour against their children has, however, been largely restricted to strategic bequests. Bernheim et al. (1985, 1986) show that bequests ensure chil- dren’s attention (in form of visits and care) and that parents strategically exploit this fact and use bequests to receive attention. In terms of the geography of the family, the literature has thus mainly focused on the strategic behaviour of children against their parents. In particular, as visits and care for parents are considered to be burdensome (see Bernheim et al. (1985)), Konrad et al. (2002) argue that children have an incentive to shift this burden to their siblings. As firstborns have the strategic advantage of choosing their geographic location earlier than their sib- lings, they have an incentive to geographically move away from their parents’ home. Konrad et al. (2002) confirm this effect in their analysis. Thus, location choice is found to be endogenous and to differ between the first child and younger siblings; whether one is an only child also affects location choice (see Konrad et al. (2002), Leopold et al. (2012)). One less-explored area, however, is the strategic behaviour of parents concerning the education level of their offspring. As Leopold et al. (2012) demonstrate for Germany, highly educated children tend to move further away once they leave their parental homes. The number of visits is reduced because children living far away have higher costs when visiting their parents.
As parents worry about receiving fewer visits in the future, it may be rational for them to limit their children’s education to a medium level. As noted above, parents’ strategic behaviour has been mainly analysed in the context of bequests (see, e.g., Bernheim et al. (1985, 1986)). There is a dearth of studies that have explored strategic parental behaviour with respect to education choices. Because longer distances increase the costs of visits and care given to parents when they grow old; a medium level of education among offspring might be of greater utility for parents than a high educational level. A high education level increases the probability that a child has a superior level of income and can offer financial support
2. Strategic Education Choices and Parents’ Wish to Keep Children Close 37
to the parents. Which of these effects dominate is theoretically indeterminate and therefore subject to empirical analysis.
We also refer to a strand of literature that addresses gender differences in educational attainment. In recent decades, girls’ level of education has rapidly increased, coming to equal or exceed boys’ level of education (see, e.g., Becker and Murphy (1988)). Nevertheless, parents in traditional cultures tend to value the education of sons slightly more than the education of daughters because daughters are still considered to have lower returns on education and are believed to have higher caring capabilities than sons (see, e.g., Leopold and Raab (2011) for Germany and Henretta et al. (1997) for the U.S.). Therefore, the costs of educating daughters at a higher level may outweigh the perceived marginal financial benefits.2 Due to cultural changes, overall negative effects for daughters have vanished over time. Perceived differences in the returns on education for boys and girls have also decreased, especially if parents have several children and can pool education and caring burdens.3 However, gender stereotyping is still observed among parents who have an only child. For only children, the burden of visits and care cannot be shared between siblings. Moreover, in rural areas, the distance to universities is larger, which also increases costs for visits to the parental home (see, e.g., Hektner (1995)).