Timing of family income, borrowing constraints, and child achievement

Abstract

I investigate the effects of the timing of family income on child achievement production. Detailed administrative data augmented with Programme for International Student Assessment test scores at age 15 are used to analyze the effects of the timing of family income on child achievement. Contrary to many earlier studies, the results suggest that the timing of income does not matter for long-term child outcomes. This is a reasonable result given the setting in a Scandinavian welfare state with generous child and education subsidies. Actually, later family income (age 12–15) is a more important determinant of child achievement than earlier income.