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Family Background, Educational Qualifications, and Meritocratic Labor Market Allocation: Evidence from Danish Siblings

A prominent strand of research in sociology analyzes how family background affects labor market outcomes among offspring with similar formal educational qualifications. Yet, previous studies are limited either by the way in which they measure family background or by the detail level by which they measure educational attainment. To address these two limitations, we develop a novel approach based on sibling similarities in labor market outcomes. Applying the approach to data on all Danes born 1965–1971, we examine the direct effect––other than through extremely granular education measures––of all combined effects of family background on occupational and income destinations. Our analyses show that the extremely fine-grained education measures can account for more than 90 percent of the total family background effect on occupational destinations, leaving little room for the processes associated with the direct effects of social origins to operate. For income destinations, however, the extremely fine-grained education measure accounts for merely three-quarters of the total family background effect. Roughly half of this direct effect on income destinations can be explained by sibling similarities in occupational choice, suggesting that family background affects income destinations through processes that operates equally within and between occupations. We discuss different mechanisms that may account for these results.