Silke Anger, Daniel D. Schnitzlein
This paper estimates sibling correlations in cognitive skills and non-cognitive skills to evaluate the importance of family background for skill formation. The study is based on a large representative German dataset, which includes IQ test scores and measures of noncognitive skills. Using a Restricted Maximum Likelihood model we find substantial influences of family background on the formation of skills. Sibling correlations of noncognitive skills range from 0.223 to 0.463, indicating that even for the lowest estimate, about one fifth of the variance can be attributed to factors shared by siblings. Calculated sibling correlations in cognitive skills are higher than 0.50, indicating that more than half of the inequality can be explained by family background. Comparing these findings to the results in the intergenerational skill transmission literature suggests that intergenerational correlations are only able to capture parts of the influence of the family on children’s cognitive and noncognitive skills. This result is confirmed by decomposition analysis and in line with findings in the literature on educational and income mobility.