Child Skill Production: Accounting for Parental and Market-Based Time and Goods Investments

Numerous empirical studies from developing countries have noted that parental education has a robust and positive effect on child learning, a result that is often attributed to more educated parents making greater investments in their children's human capital. However, the nature of any such investment has not been well understood. This study examines how parental education affects various parental investments in goods and time used in children's human capital production via an unusually detailed survey from rural China. It is found that more educated parents make greater educational investments in both goods and time and that these relationships are generally robust to a rich set of controls. Evidence suggests that making greater investments in both goods and time stems both from higher expected returns to education for children and from different preferences for education among more educated parents. A second key finding is that the marginal effect of mother's education on educational investments is generally larger than that of father's education. Disciplines International and Comparative Education Comments Copyright The University of Chicago Press. Reprinted from Comparative Education Review, Volume 49, Issue 2, May 2005, pages 173-204. Publisher URL: http://dx.doi.org/10.1086/503582 This journal article is available at ScholarlyCommons: http://repository.upenn.edu/gansu_papers/1 Comparative Education Review, vol. 49, no. 2. 2005 by the Comparative and International Education Society. All rights reserved. 0010-4086/2005/4902-0003$05.00 Comparative Education Review 173 Keeping Teachers Happy: Job Satisfaction among Primary School Teachers in Rural Northwest China TANJA SARGENT AND EMILY HANNUM

Numerous empirical studies from developing countries have noted that parental education has a robust and positive effect on child learning, a result that is often attributed to more educated parents making greater investments in their children’s human capital. However, the nature of any such investment has not been well understood. This study examines how parental education affects various parental investments in goods and time used in children’s human capital production via an unusually detailed survey from rural China. It is found that more educated parents make greater educational investments in both goods and time and that these relationships are generally robust to a rich set of controls. Evidence suggests that making greater investments in both goods and time stems both from higher expected returns to education for children and from different preferences for education among more educated parents. A second key finding is that the marginal effect of mother’s education on educational investmen...

Drawing from family investment model, the authors tested parental monetary and time investment pathways underlying the relation between lower income and poorer math achievement during second grade in a sample of Bangladeshi children (N = 425, 52% boys, Mage = 5.60, SD = 1.09) and their mothers. Particularly, they collected 2-web data on family income and parental investments from the mothers during 2016 through 2017; first grade and second math scores were collected from the schools during 2017 through 2018. The results from structural equation modeling suggested that lower income and fewer monetary and time investments in children's education during their first to second grade were directly and significantly associated with children's poorer math scores during second grade. The parental time investment was stronger than the parental monetary investment in the relation between lower income and poor math achievement within the sample. Future directions for research and policy implications are discussed.

This paper studies the multidimensional nature of investments in children within a dynamic framework. In particular, we examine the roles of parental time investments, purchased home goods/services inputs, and market-based child care services. We first document strong increases in total investment expenditures by maternal education; yet expenditure shares, which skew heavily towards parental time, vary little with parental schooling. Second, we develop an intergenerational lifecycle model with multiple child investment inputs to study these patterns and the impacts of policies that alter the prices of different inputs. We analytically characterize investment behavior, focusing on the substitutability of different investment inputs and the way parental skills affect the productivity of family-based inputs. Third, we develop an estimation strategy that exploits intratemporal optimality conditions based on relative demand to estimate substitutability between inputs, the relative productivity of different inputs, and the role played by parental education. This approach requires no assumptions about the dynamics of skill investment, preferences, or credit markets. We also account for mismeasured inputs and wages, as well as unobserved heterogeneity in parenting skills. We further show how noisy measures of child achievement (measured several years apart) can also be incorporated in a generalized method of moments approach to additionally identify the dynamics of skill accumulation. Fourth, we use data from the Child Development Supplement of the Panel Study of Income Dynamics to estimate the skill production technology for children ages 12 and younger. Our estimates suggest complementarity between parental time and home goods/services inputs as well as between these family-based inputs and market-based child care, with elasticities of substitution ranging from 0.2 to 0.5. We find no systematic effects of parental education on the relative productivity of parental time and other home inputs. Finally, we use counterfactual simulations to explore the extent and sources of variation in investments across families, as well as investment responses to changes in input prices. We find that variation in prices explains 48% of the overall variance in investment expenditures, and differences in wages explain more than half of the investment expenditure gap between college-educated and non-college-educated parents. We further show that accounting for the degree of input complementarity implied by our estimates has important implications for the responses of individual inputs to any price change and for the responses in total investments and skill accumulation to large (but not small) price changes. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

This paper studies the multidimensional nature of investments in children within a dynamic framework. In particular, we examine the roles of parental time investments, purchased home goods/services inputs, and market-based child care services. We first document strong increases in total investment expenditures by maternal education; yet expenditure shares, which skew heavily towards parental time, vary little with parental schooling. Second, we develop an intergenerational lifecycle model with multiple child investment inputs to study these patterns and the impacts of policies that alter the prices of different inputs. We analytically characterize investment behavior, focusing on the substitutability of different investment inputs and the way parental skills affect the productivity of family-based inputs. Third, we develop an estimation strategy that exploits intratemporal optimality conditions based on relative demand to estimate substitutability between inputs, the relative productivity of different inputs, and the role played by parental education. This approach requires no assumptions about the dynamics of skill investment, preferences, or credit markets. We also account for mismeasured inputs and wages, as well as unobserved heterogeneity in parenting skills. We further show how noisy measures of child achievement (measured several years apart) can also be incorporated in a generalized method of moments approach to additionally identify the dynamics of skill accumulation. Fourth, we use data from the Child Development Supplement of the Panel Study of Income Dynamics to estimate the skill production technology for children ages 12 and younger. Our estimates suggest complementarity between parental time and home goods/services inputs as well as between these family-based inputs and market-based child care, with elasticities of substitution ranging from 0.2 to 0.5. We find no systematic effects of parental education on the relative productivity of parental time and other home inputs. Finally, we use counterfactual simulations to explore the extent and sources of variation in investments across families, as well as investment responses to changes in input prices. We find that variation in prices explains 48% of the overall variance in investment expenditures, and differences in wages explain more than half of the investment expenditure gap between college-educated and non-college-educated parents. We further show that accounting for the degree of input complementarity implied by our estimates has important implications for the responses of individual inputs to any price change and for the responses in total investments and skill accumulation to large (but not small) price changes.

This paper estimates the impact of parents' time investment in young children, their socioeconomic status and family structure on long-term outcomes of children. We developed and estimated a model of dynastic households in which altruistic individuals choose fertility, labor supply, and time investment in children sequentially, using data on two generations from the PSID. Parental behavior affects the education outcomes of children, their labor market earnings, and also their marriage market outcomes. The dynastic framework provides a natural way to aggregate the outcomes of children as it is measured by their valuation function. Time allocation patterns differ by race, gender, education and family structure (number of children and marital status). Both the returns to parental time investment and the costs vary across these groups. On average black individuals invest less time with their children. Our estimation results show that despite the fact that the valuation function is higher for whites and the fact that conditional on education, blacks earn less than whites, on the margin, there are no significant race differences in the rate of returns to paternal time investment, and blacks have a higher return to maternal time investment than whites. The main reason for the lower parental time investment by blacks is the differences in family structure. There is a significantly higher proportion of black single mothers than white single mothers and the opportunity costs of time for single mothers are higher than the opportunity costs of married mothers due to income sharing and transfers within married households. We also find that the returns to maternal time investment are significantly higher for boys. This implies that mothers act in a compensatory manner, favoring low ability children in the family. Since girls already have a higher likelihood of achieving a high level of education than boys, mothers seem to invest more time in boys than in girls as the number of children increases. Our findings suggest a significant quality-quantity trade-off. The level of investment per child is smaller the larger the number of children, thus, this decline in the per-child investment is driven by the time constraint and the opportunity costs of time and not by the properties of the production function technology of children. We, also find that quality-quantity trade-off for blacks is significantly larger than that of whites. This is mainly due to the higher fertility of single black female and the resulting greater time constraint they face.

Research Findings: This study investigated the sequential mediating effects of parental material investment (MI) and time investment (TI) upon the correlation between family socioeconomic status (SES) and toddlers’ development (TD). Data derived from a 2016 data set, including a sample of 1,316 toddlers based in 117 villages across 22 counties within northwestern China, were utilized. Parents completed the Bayley Scales of Infant and Toddler Development III (BSID-III) and Ages & Stages Questionnaires: Social-Emotional (ASQ: SE). The mediation analysis revealed: (1) a significant positive correlation among family SES, parental material investment, time investment, and the development of toddlers aged 0–3 years; (2) family SES indirectly impacted toddlers’ development through the singular mediating pathway of material investment significantly, and the single mediating path of time investment was found to be insignificant; and (3) both material investment and time investment were recognized as the sequential mediators between family SES and toddler development. Practice or Policy: The study’s findings underscore the aspects of parental material and time investment that optimally support toddlers’ development. These results may also guide the structure and implementation of family interventions and policies designed to reduce the developmental disparity among toddlers from families of differing SES.

Can daycare replace parents’ time spent with children? We explore this by using data on how parents spend time and money on children and how this spending is related to their child’s development.

Recent research has documented the relatively poor performance of boys, especially those from single-mother households, on a number of outcomes. Differences in non-cognitive skills are often cited as a main contributing factor. However, we still know little about the underlying mechanisms driving differences in non-cognitive skills and other outcomes. This paper provides empirical evidence that parental time investments, defined as the amount of time parents spend participating in activities with their child, change differentially by child gender following a transition from a two-parent to single-mother household. Boys experience larger investment reductions following the change in household structure, which may help facilitate previously documented gender gaps in non-cognitive skills for those in single-mother households. Boys lose an estimated additional 3.8 hours per week in fathers' time investments, nearly 30 percent of average weekly paternal investments across the sample. The differential is increasing with age, concentrated in leisure and entertainment activities, and there is little to no evidence that single mothers compensate for the loss by increasing investments to boys, relative to girls.

Recent research has documented the relatively poor performance of boys, especially those from single-mother households, on a number of outcomes. Differences in noncognitive skills are often cited as a main contributing factor. However, we still know little about the underlying mechanisms driving differences in noncognitive skills and other outcomes. This article provides empirical evidence that parental time investments, defined as the amount of time that parents spend participating in activities with their child, change differentially by child gender following a transition from a two-parent to single-mother household. Boys experience larger investment reductions following the change in household structure, which may help facilitate previously documented gender gaps in noncognitive skills for those in single-mother households. Boys lose an estimated additional 3.8 hours per week in fathers' time investments, nearly 30% of average weekly paternal investments across the sample. The difference is increasing with age, concentrated in leisure and entertainment activities, with little to no evidence that mothers increase investments in boys relative to girls after such transitions.

This study describes how parental time investments in children in immigrant families vary according to children’s citizenship status. In families with multiple children, parents make allocation decisions about how to invest in each child. In immigrant households, a child’s citizenship status may shape parental time allocations because of how this status relates to a child’s prospects for socioeconomic mobility. It is unclear whether parents reinforce citizenship differences among siblings, compensate for these differences, or treat all siblings equally regardless of citizenship status. Moreover, past empirical research has not investigated differences in parental time investments in siblings with different citizenship statuses. To evaluate differential time investments in children based on citizenship, we conduct a quantitative analysis using data from the American Time Use Survey from 2003–2019 and focus on children in immigrant households with at least two children (N = 13,012). Our research shows that parents spend more time with children who have citizenship, but this result is primarily explained by a child’s age and birth order. Our study provides a basis for further inquiry on how legal contexts shaping socioeconomic mobility may influence micro-level family processes in immigrant households.

This paper constructs a quantitative model of intergenerational mobility in which lifetime income mobility is shaped by various channels including parental time investments in children. The calibrated model delivers positive educational gradients in parental time investment, as observed in the data, and also successfully accounts for untargeted distributional aspects of income mobility, captured in the income quintile transition matrix. The model implies that removing the positive educational gradients in parental time investment during the whole childhood would reduce intergenerational income persistence nearly by 40 percent. Policy experiments suggest that subsidies to childhood investments that can diminish positive educational gradients in parental time investments would increase intergenerational mobility, and that there are better ways of subsidizing investments to achieve greater mobility in terms of aggregate output and welfare.

Mindset is a term commonly used to represent an individual’s beliefs about the role of ability and effort in learning. In this study, we assessed parental mindset—ability mindset and effort mindset—for 497 parents in two countries (United States and Denmark), all of whom had at least one child between 3 and 5 years of age. Of primary interest was assessing the relations between parental mindset and home-learning activities of four types: family learning activities, learning extensions, parental time investment, and parental school involvement. Findings showed that parents in the United States and Denmark held similar ability and effort mindsets, but differed significantly in home-learning activities, with US parents providing significantly more family learning activities, learning extensions, and parental time investment than Danish parents, although the latter had significantly higher levels of school investment. Furthermore, findings showed that parents’ effort mindset was a significant predictor of family learning activities and parental time investment and that country moderated the relations between effort mindset and parental time investment. For US parents, higher levels of effort mindset were associated with higher levels of parental time investment, but this was not the case for Danish parents. We call for experimental work to determine the causal relations between parental mindset and home-learning activities, and rigorous cross-cultural research to explore the universality of parental mindset in distinctive cultural settings.

We use novel diary surveys coupled with universities' administrative student data for the last three decades to document that increased competition for university places at elite institutions in the United Kingdom contributes to explain growing gaps in time investments between college and non-college educated parents. Competition for university places in the UK grew significantly during the 1980s and early 1990s, and gradually diminished afterwards. We find that the gap in time investments by college and non-college educated parents and their children widened up precisely during this first period, especially in terms of human capital enhancing activities.

Parental investments as well as school quality are important determinants of children’s later-life outcomes. In this paper, we shed light on what determines parental investments and study how parents perceive the returns to parental time investments, material investments and school quality, as well as the complementarity/substitutability between the different inputs. Using a representative sample of 1,962 parents in England, we document that parents perceive the returns to 3 hours of weekly parental time investments or £30 of weekly material investments to matter more than moving a child to a better school. Parents perceive the returns to time and material investments to be diminishing and perceive material investments as more productive if children attend higher quality schools. Perceived returns do not differ with the child’s initial human capital or gender and, surprisingly, we find no differences in perceived returns by the parents’ socioeconomic background. Consistent with parental beliefs playing an important role in parental investment decisions, perceived returns are found to be highly correlated with actual investment decisions.