Parents, Schools and Human Capital Differences across Countries

Results from international standardized tests show large cross-country differences in students' performances. Where do these gaps come from? This paper argues that differences in cultural environments and parental inputs may be of great importance. We show that the school performance of second-generation immigrants is similar to that of native students in their parents' countries of origin. This holds true even after accounting for different family background characteristics, schools attended and selection into immigration. We quantify the overall contribution of various parental inputs to the observed cross-country differences in PISA test performance and show that they account for between 12% and 30% of the total variation and for most of the gap between East Asia and other regions. This pattern calls into questions whether PISA scores should be interpreted only as a quality measure for a country's educational system, since they actually contain an important intergenerational and cultural component.