The Resource Dilution Hypothesis and related theories predict that sibship size has a negative causal effect on educational attainment. However, because sibship size is likely to be endogenous to children's schooling in the sense that parents who have many children also have other socio-economic characteristics that lead to low educational attainment, it is difficult to determine if sibship size actually has a negative effect on educational attainment or whether the effect is spurious. This article deals with the endogeneity problem by using mothers' and fathers' inherited reproductive capacity as a `natural' experiment which affects sibship size but which, arguably, has no direct effect on children's educational attainment. I analyse data from the Wisconsin Longitudinal Study and use information on mothers' and fathers' sibship sizes and age at birth of first child as instruments for sibship size. After correcting for endogeneity, I find that sibship size has a negative causal effect on educational attainment.
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