Sibship size and educational attainment. A joint test of the Confluence Model and the Resource Dilution Hypothesis.

Studies on family background often explain the negative effect of sibship size on educational attainment by one of two theories: the Confluence Model (CM) or the Resource Dilution Hypothesis (RDH). However, as both theories - for substantively different reasons - predict that sibship size should have a negative effect on educational attainment most studies cannot distinguish empirically between the CM and the RDH. In this paper, I use the different theoretical predictions in the CM and RDH on the role of cognitive ability as a partial or complete mediator of the effect of sibship size to distinguish the two theories and to identify a unique RDH effect on educational attainment. Using sibling data from the Wisconsin Longitudinal Study (WLS) and a random effect Instrumental Variable model I find that, in addition to a negative effect on cognitive ability, sibship size also has a strong negative effect on educational attainment which is uniquely explained by the RDH.