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Despite the well-documented advantages of additional years of education, many Australians still leave school before completing Year 12, and less than one-half of high-school graduates complete tertiary studies. The reasons for this have been the subject of considerable research, with one of the primary aims being to investigate the role of inequality of opportunity as a determinant of educational attainment. Where inequality of opportunity adversely affects educational outcomes, appropriate policy intervention may be able to increase both efficiency and equity ( ). In this article, we use information on twins to assess the role of family background (or environment) in determining educational attainment in Australia, and to assess the changes in this role over recent decades. Our best estimate is that environmental diversity accounts for as little as 8 per cent of the variance in educational outcomes. Moreover, in the face of rather substantial changes in the arrangements for financing tertiary education in Australia, the influence of common family background on educational outcomes has not changed.
