The impact of family composition on adult earnings

Abstract: This thesis addresses to what extent childhood family composition – the number of siblings and whether the parents live together, or whether there are non-parental adults and/or half-siblings in the household or not – contributes to variations in adult earnings. The theoretical perspective suggests that resources mediate the effect. While research has shown that siblings, as well as divorce and remarriage, are negatively linked to child outcomes, there are inconsistencies in previous literature. There has been debate over the unconfoundedness of previous studies, something that is handled here by analyzing large sets of representative data using a robust parameter. The longitudinal dataset used is based on Swedish administrative data and the cohorts analyzed are born in the beginning of the 1970s. The data structure is well suited for the assumptions underlying the semi-parametric method propensity score matching.The findings show that family size impacts on adult earnings. However, this is not always of concern. For example, no effect of siblings is found in affluent families, and if siblings are closely spaced this results in better outcomes for children. Divorce and remarriage do not seem to lower the future earnings of children. Thus, this thesis shows that some of the most well-established patterns in the sociology of the family, namely the link between number of siblings and adult earnings, and between divorce/family re-formation and adult earnings, can be broken by resources.