This paper studies the role of ethnicity in the intergenerational transmission of educational attainment within the framework outlined by Borjas (Quarterly Journal of Economics, 1992, 107(1), 123-150). Relying on heteroskedasticity to identify parameters in the presence of endogenous regressors, I find evidence that the ordinary least squares estimates of the effect of ethnic capital on intergenerational transmission of education are biased upwards due to the transfer of unobserved ability. I also find that, while the role of parental capital has declined over time, ethnic capital has a relatively constant effect on intergenerational transmission of educational attainment.
