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Reinforcement or compensation? Parental responses to children’s revealed human capital levels

Fan, W; Porter, C; (2020) Reinforcement or compensation? Parental responses to children’s revealed human capital levels. Journal of Population Economics , 33 (1) pp. 233-270. 10.1007/s00148-019-00752-7. Green open access

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Abstract

A small but increasing body of literature finds that parents invest in their children unequally. However, the evidence is contradictory, and providing convincing causal evidence of the effect of child ability on parental investment in a low-income context is challenging. This paper examines how parents respond to the differing abilities of primary school-aged Ethiopian siblings, using rainfall shocks during the critical developmental period between pregnancy and the first 3 years of a child’s life to isolate exogenous variations in child ability within the household, observed at a later stage than birth. The results show that on average parents attempt to compensate disadvantaged children through increased cognitive investment. The effect is significant, but small in magnitude: parents provide about 3.9% of a standard deviation more in educational fees to the lower-ability child in the observed pair. We provide suggestive evidence that families with educated mothers, smaller household size and higher wealth compensate with greater cognitive resources for a lower-ability child.

Type: Article
Title: Reinforcement or compensation? Parental responses to children’s revealed human capital levels
Open access status: An open access version is available from UCL Discovery
DOI: 10.1007/s00148-019-00752-7
Publisher version: https://doi.org/10.1007/s00148-019-00752-7
Language: English
Additional information: © This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
Keywords: Children, Human capital formation, Parental investment, Intrahousehold resource allocation
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10089242
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