"We estimate a flexible reduced form dynamic model of schooling choices and labor market outcomes in France. Our analysis focuses on the comparison between second-generation immigrants and their French-natives counterparts. We show that the gap in higher education attainments between those two sub-populations is mainly explained by parents' background, and that schooling investment is the main determinant of the gap in permanent employment. After conditioning on schooling and observed characteristics, we find that ethnic origin explains less than 6% of the gap in access to permanent employment. A test of equality of counterfactual probabilities of accessing permanent employment across ethnic groups (measured at identical individual characteristics) typically fails to be rejected."

Support: Paper