Children's Human Capital Research Articles

Parental investment in children's human capital in urban China

The present study tests the extent of parental forgone consumption used instead to invest in children's human capital by use of intrahousehold resource allocation models. Using an unusual, comprehensive data set for urban China, there is more spending on boys aged 13 to 15 but more on girls aged 16 to 18, suggesting that standard human capital theories and traditional perceptions of gender bias do not completely explain educational expenditure decisions. The evidence from urban China is consistent, though, with human capital models which consider parental intertemporal preferences. Also, the findings suggest that the perceived bias in favour of sons exists weakly in contemporary urban China.

Parental Wealth and Adult Children's Welfare in Marriage

Many studies find that parental resources importantly determine children's human capital, schooling returns, and earnings. The collective household approach suggests that, in addition, parental resources of marital partners may importantly affect resource distributions within marriage. This paper presents empirical results consistent with this framework. They suggest that parental wealth continues to play roles in augmenting welfare of children into adulthood beyond provision of human capital in early life-cycle stages or direct financial aid during adulthood, and that actual transfers from parents to adult children do not fully measure influences of parental wealth on behaviors and welfare of adult children.

Making Conditional Cash Transfer Programs More Efficient: Designing for Maximum Effect of the Conditionality

Conditional cash transfer programs are now used extensively to encourage poor parents to increase investments in their children's human capital. These programs can be large and expensive, motivating a quest for greater efficiency through increased impact of the programs' imposed conditions on human capital formation. This requires designing the programs' targeting and calibration rules specifically to achieve this result. Using data from the Progresa randomized experiment in Mexico, this article shows that large efficiency gains can be achieved by taking into account how much the probability of a child's enrollment is affected by a conditional transfer. Rules for targeting and calibration can be made easy to implement by selecting indicators that are simple, observable, and verifiable and that cannot be manipulated by beneficiaries. The Mexico case shows that these efficiency gains can be achieved without increasing inequality among poor households.

An equilibrium model of child maltreatment

We propose a dynamic equilibrium model of human capital development of a child that can explain why a parent–child relationship might lead to child maltreatment. Assuming that a parent cannot observe a child's human capital accumulation or effort, and that the child's time preference develops endogenously, an unstable path of the parent's beliefs regarding the child can persist in equilibrium when the parent faces a high degree of uncertainty in inferring the child's human capital. The parent with an initial high estimate of the human capital then tends to underestimate the child's effort, which results in persistently punitive – abusive — interactions.

Keeping Teachers Happy: Job Satisfaction among Primary School Teachers in Rural Northwest China

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

LAREAU, Annette. UNEQUAL CHILDHOODS: Class, Race, and Family Life

LAREAU, Annette. UNEQUAL CHILDHOODS: Class, Race, and Family Life. Berkeley, CA: The University of California Press, 2003, 331 pp., $21.95 softcover and $55.00 hardcover.Unequal Childhoods is an important contribution to the literature on social class and its effects on children's upbringing and life chances. Through observation and interview in ten family based vignettes, Annette Lareau illustrates the gradual transformation of the internal dynamics of families - for both the poor and the privileged. Focusing on the daily activities and routines of families, Lareau illustrates how differential access to resources of all kinds translate into class based differences in child rearing practices, especially when interfaced with community of residence, schooling, recreational patterns and relations with extended family.Among North American families, education and skill based disparities in income and opportunity are growing along with the erosion of equalizing social supports. Forty years ago John Porter noted in The Vertical Mosaic (1965) that middle class life styles rest on the consumption of unevenly distributed values - real middle class status did not rest on gadgetry but rather the ability to consume value associated goods. Lareau suggests such goods are having a transformative impact on child rearing practices.In her formulation of parenting styles, Lareau distinguishes between the middle class preoccupation with concerted cultivation and the working class and poor belief in overseeing the natural growth of children. The former encourages children to be competitive - even with siblings, acquire expertise in multiple tasking, and learn to interact with adults and adult institutions in an instrumental fashion - with parents as back up. Overall, such children acquire a sense of entitlement absent in their working class and economically disadvantaged peers. Just as parents of their disadvantaged peers insist on authoritarian compliance, they in turn interact with schools, government services, and the like, as subordinates rather than aggressive advocates for their children.Lareau's middle and upper middle class children are involved in a broad array of extra curricular activities. Commitments to music lessons, sports teams, and academic clubs are amassed in such quantities that scheduling and participation sap the energy of children and parents. It would seem that some of Lareau's families are indeed overscheduled, with parent's lives revolving around their children's activities. Enhancing their children's Human Capital for the future seems to be the primary parental motivation, but children often enjoy these activities make friends through them, and using their own internal calculus, position themselves for the next step in social and educational development. …

Survival of the gene, intergenerational transfers and precautionary saving

This paper provides a model of bequest and investment in children's human capital at low incomes. It posits that parents and children are linked through their common concern of grandchildren and intergenerational transfers provide a material basis for the perpetuation of the family line. The model characterizes intergenerational strategic interactions in a dynamic game theoretical framework. Moreover, it explores intergenerational uncertainty as a source of precautionary saving. In contrast with the existing literature, the model implies that there are qualitative differences between precautionary saving from one's own income uncertainty and precautionary bequests from children's income uncertainty.

Social Policies under SAP in Ghana: Implications for Children's Human Capital Formation

ABSTRACT In the 1980s and 1990s, the International Monetary Fund (imf) and World Bank recommended a structural adjustment program (SAP) in Ghana as a response to its economic crises. This paper examines educational and health policies under SAP and addresses the following issues: How did educational and health policies impact children? What are the implications of these impacts for the future of children and human capital formation? To answer these questions, we investigate the (1) availability and accessibility of schools and health facilities; (2) quality of schools and health care; (3) costs associated with schooling and using health facilities; and (4) factors that moderate the impact of education and health policies on the lives of children. The findings are that of (1) low educational attainment; (2) poor health, high morbidity and mortality levels; and (3) inequities based on geography, income, and gender. The implication for policy is that there is a need to promote human capital development by investing in it.

In-Home Training and the Production of Children's Human Capital

This paper adapts the idea of on-the-job training (OJT) to investments that families make in children before formal schooling begins. Like OJT, in-home training occurs in informal settings, requires costly time inputs and is complementary with formal schooling. In addition to choosing among home production, leisure, and market work, parents also choose which particular home activities to pursue. That working mothers dramatically reduce the time they devote to leisure, sleep, and other home activities in order to preserve their time in human capital-building activities with children, illustrates and validates the home production framework.

American Corporate Governance and Resilient Families: Investing in Children's Human Capital in Turbulent Times

This article considers the relationship between corporate governance and the well-being of children. The United States has a serious skills deficit among its younger workers. Experts from many fields agree that human capital development in the early years of life profoundly shape the adult worker. Parents have the greatest influence on human capital development during this time. Parents are trying to do their best, yet socio-economic changes make it increasingly difficult for parents to raise their children. This article considers how the economic transition to the new economy and the social revolution concerning changing gender roles intersect and interact to negatively impact the family. This article asserts that corporations need to take responsibility to promote resilient families in these turbulent times by implementing better work/family policies. This article considers how a new political coalition of parents is forming and suggests that this group seek to harness the pension power of American working families to push corporations to implement better work/family programs.

Should Transfers To Poor Families Be Conditional On School Attendance? A Household Bargaining Perspective*

This article considers the welfare implications of transfers to poor families that are conditional on school attendance and other forms of investment in children's human capital. Family decisions are assumed to be the result of (generalized) Nash bargaining between the two parents. We show that, as long as bequests are zero, conditional transfers are better for children than unconditional transfers. The mother's welfare may also be improved by conditional transfers. Thus, conditioning transfers to bequest‐constrained families have potentially desirable intergenerational and intragenerational welfare effects. Conditioning transfers to unconstrained families make every family member worse off.

Intergenerational mobility, sibling inequality and borrowing constraints

This paper studies differences in social mobility between rich and poor families. The paper shows that borrowing constraints retard social mobility among the poor by preventing poor parents from investing optimally in the their children's human capital. This evidence contradicts several recent studies that argue that innate ability is the overriding determinant of socioeconomic performance in the United States. The paper also shows that sibling inequality appears to be independent of parental wealth, which in turn contradicts the predictions of various economic models of resource allocation within the family.

The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment

A strong positive association between one's school attainment and that of one's parents has been consistently documented in numerous empirical studies. The underlying cause of this intergenerational correlation has been the subject of contentious debate in the social sciences for many years. Two competing types of explanations are prominent. The first is based on the heritability of traits, that is, that children of more educated parents may inherit the abilities, personalities and preferences that led to the higher educational achievement of their parents. The second type of explanation is based on human capital production, namely that more educated parents, due to their own preferences for more educated children and/or due to their higher wealth, may invest more heavily in their children's human capital.

The Rule of One-Third

The Rule of One-Third guaranteed wives one-third of their husband's estate upon marital dissolution through death or divorce. We document the historical ubiquity of this legal construct and show that without a wife's residual claim on her husband's estate, children's outcomes are imperiled. Using ancient Roman law as an example, we argue that the patriarch, or paterfamilias, is the main legal entity with an interest in creating and enforcing the Rule of One-Third. Then, in a game-theoretic model, we demonstrate that the Rule of One-Third obtains when mothers' and fathers' marginal impacts on their children's human capital are equal. We conclude that the Rule of One-Third arose in many societies because it places the cost of marital dissolution on the household rather than society and solves a contracting problem between the husband and wife when each is specialized in tasks the other cannot perform well.

Economic integration and growth under intergenerational financing of human-capital formation

This paper examines the patterns of economic integration and endogenous growth in a two-country overlapping-generations world, in which the formation of children's human capital is financed by parents. It explores the influence of cross-border external effects in human capital on growth. Interestingly, world integration can enhance (reduce) long-run growth in both countries if cross-border external effects in human capital are sufficiently strong (weak).

Economies, Human Capital, and Natural Assets

Human capital concerns are used to structure links between the economy and the environment. Suggestions for empirical work to explore these structures are provided. Particular attention is devoted to connections between environmental hazards and influences upon parents’ decisions to invest in forming children's human capital.

Intergenerational Mobility, Siblings' Inequality and Borrowing Constraints

This paper uncovers differences in social mobility between rich and poor families. The paper shows, in particular, that borrowing constraints retard social mobility among the poor by preventing poor parents from investing optimally in the their children's human capital. This evidence contradicts several recent studies that argue that innate ability is the overriding determinant of socioeconomic success in the United States. The paper also shows that siblings' inequality seems to be independent of family wealth, which clearly contradicts the predictions of most economic models of resource allocation within the family.

The effects of gender control on fertility and children's consumption.

The authors analyzed the effects of preference for children of a particular gender upon fertility and children's welfare, with and without sex selection or gender control. The impacts upon investments in children's human capital, bequests, and fertility are studied in a model based upon parental altruism. Both pure sex preference, a feature of the parental utility function, and indirect preference resulting from price effects are modelled in this paper. When there is no gender control, the impact of pure sex preference is seen in smaller consumption for daughters than for sons. However, when gender control is employed, sex preference increases the sex ratio and it is possible that sisters may on, average, consume no less than their more numerous brothers. Parents who practice gender control have larger families than if sex selection techniques were unavailable. The effect is magnified if sons' earnings opportunities are better than daughters.

Education finance reform: A dynamic perspective

We use a dynamic Tiebout model to analyze the consequences of moving from a pure local system of education finance to a pure state system of finance in which each student receives the same resources. While much of the education finance literature focuses on the static or immediate effects of such a change, our analysis also examines the dynamic effects. Numerical simulations for a calibrated version of our model indicate that these dynamic effects are very important. Comparing steady states, we find that aggregate welfare increases on the order of 10 percent following the switch to a state system. The key to this welfare gain is that a local system yields inefficiently low investment in human capital of children from low-income families.

Education finance reform: A dynamic perspective

We use a dynamic Tiebout model to analyze the consequences of moving from a pure local system of education finance to a pure state system of finance in which each student receives the same resources. While much of the education finance literature focuses on the static or immediate effects of such a change, our analysis also examines the dynamic effects. Numerical simulations for a calibrated version of our model indicate that these dynamic effects are very important. Comparing steady states, we find that aggregate welfare increases on the order of 10 percent following the switch to a state system. The key to this welfare gain is that a local system yields inefficiently low investment in human capital of children from low-income families.