How are shiny odds affected by breeding shiny parents in Pokemon GSC?

Yes, shiny parents are more likely to produce shiny offspring in generatation 2. The chance is 1/64 in any of the following cases:

• Both parents are shiny
• One parent is a shiny Ditto
• One parent is shiny, the other is not Ditto, and the child is the opposite sex of the shiny parent

This is due to the way stats are passed down. IVs, which are responsible for shininess, are partially inherited from the Ditto parent if a Ditto is involved, or from the opposite parent if not, i.e. a male baby will inherit based on its mother's IVs.

Since a shiny pokemon has, by definition, the correct IVs to be shiny, inheriting those stats increases the chance of being shiny.

The maths itself, and the 1/64 chance, can be found in this answer.