Human Capital Investment In Children Research Articles

Human capital investments in children – A comparative analysis of the role of parent- child shared time in selected countries

Eltern investieren in ihre Kinder auf unterschiedliche Weise. Wir untersuchen wie das Ausmas und die Zusammensetzung von Eltern-Kind Zeiten in unterschiedlichen Landern mit differenten Wohlfahrtsregimes variiert: Finnland, Deutschland und die Vereinigten Staaten von Amerika. Komposition: Wir testen die Hypothese der Eltern-Kind Zeiten als eine Form von Humankapitalinvestitionen in Kinder mit einem 'propensity score treatment effects'-Ansatz fur die mogliche Endogenitat der Zeitverwendung und Humankapitalinvestition. Resultat: Wohlfahrtsregime haben einen signifikanten Einfluss auf die von Eltern mit ihren Kindern verbrachte Zeit. Unsere Resultate unterstutzen die Hypothese, dass Eltern-Kind Zeiten, die nicht als Kinderbetreuung zu charakterisieren sind, Humankapital anreichern. Die starkste Unterstutzung wurde fur die Bereiche Freizeit und gemeinsam verbrachte Essenszeiten gefunden.

Intergenerational income immobility in Finland: contrasting roles for parental earnings and family income

An intergenerational model is developed, nesting heritable earning abilities and credit constraints limiting human capital investments in children. Estimates on a large, Finnish data panel indicate very low transmission from parental earnings, suggesting that the parameter of inherited earning ability is tiny. Family income, particularly during the phase of educating children, is shown to be much more important in shaping children’s lifetime earnings. This influence of parental incomes on children’s earnings rises as the children age because the returns to education rise. Despite Finland’s well-developed welfare state, persistence in economic status across generations is much higher than previously thought.

Human Capital Investments in Children: A Comparative Analysis of the Role of Parent-Child Shared Time in Selected Countries

Parents invest in their children's human capital in several ways. We investigate the extent to which the levels and composition of parent-child time varies across countries with different welfare regimes: Finland, Germany and the United States. We test the hypothesis of parent-child time as a form of human capital investment in children using a propensity score treatment effects approach that accounts for the possible endogenous nature of time use and human capital investment. Result: There is considerable evidence of welfare regime effects on parent-child shared time. Our results provide mixed support for the hypothesis that non-care related parent-child time is human capital enriching. The strongest support is found in the case of leisure time and eating time.

Poverty Dynamics in Poland - Selected Quantitative Analyses

The present report summarises the outcome of a research project carried out jointly by researchers of the Polish Center for Social and Economic Research Foundation (CASE) and the German Centre for European Economic Research (ZEW) and funded by the Volkswagen foundation. The objective of this project is to analyse the mechanisms at work in the rise and persistence of poverty during transition in Poland, as well as its consequences for selected groups of the population.The transition process from a centralised to a market economy in Poland has been accompanied by an unprecedented increase in poverty and a deepening of inequality across households - not only in terms of income but also in terms of socio-economic status. Although a small number of studies describing the economic situation of the poor in Poland have been undertaken, our understanding of the mechanisms that make poverty persist in the household context is considerably limited. The interaction of a number of factors may for example, result in individuals being trapped in a vicious circle of poverty. Low household income may lead to social exclusion and family distress, which is likely to have far-reaching consequences for all household members. Social exclusion may contribute to foster alcoholism, impede the human capital investment in children, and thus jeopardise the socioeconomic situation of the next generation. Socially excluded people experience severe difficulties in finding re-employment. Social transfers might even worsen the situation by providing a disincentive to seek work. We need to understand the causes underlying the developments in social and economic hardship of Polish families during the course of the transition process. The introductory chapter therefore offers a general look at the picture of poverty in Poland; trends and new research results are described. In order to improve our understanding of the causes of social exclusion and to contribute to filling the gap in research we do not, however, restrict our attention solely to the analysis of the extent and nature of poverty in general but rather focus our analysis on issues that have been somewhat overlooked. This project contributes to the literature by investigating empirically different dimensions of the poverty debate in Poland - ranging from social exclusion through the relationship between transfers and labour supply to the transmission of poverty across generations. The empirical analyses are carried out on the basis of individual and household histories which are observed in the Polish Labour Force Survey and of administrative data on social assistance beneficiaries.

LONGEVITY, RETIREMENT, AND CAPITAL ACCUMULATION IN A RECURSIVE MODEL WITH AN APPLICATION TO MANDATORY RETIREMENT

This paper explores how retirement timing, together with life-cycle saving and human capital investment in children, responds to rising longevity in a recursive model with altruistic agents. We find that rising longevity raises the retirement age. If initial life expectancy is not too high, rising longevity also raises human capital investment in children and the saving rate. Through these channels, rising longevity can be conducive to long-run economic growth. A binding mandatory retirement age reduces human capital investment and the growth rate, raises the saving rate, and reduces welfare.

FISCAL POLICY AND ENDOGENOUS GROWTH IN A BEQUEST-CONSTRAINED ECONOMY

Evidence suggests that the vast majority of planned altruistic transfers between generations are human capital investments in children (households are generally bequest-constrained). This paper demonstrates that empirically-based calibrations of simple overlapping generations models with altruism generate binding bequest constraints with realistic endogenous growth rates and returns to capital. We also show how intergenerational and intragenerational redistributions of wealth affect long-run growth in bequest-constrained economies. Redistribution is a feature of fiscal policy abstracted away from by the standard infinitelylived representative agent models used to analyze endogenous growth. THE INFINITELY-LIVED representative agent model (oo-model) has been the predominate tool used to examine long-run endogenous growth (Romer 1986; Lucas 1988; Rebelo 1991). The implicit justification for assuming an infinite planning horizon for the agent is that the current generation is linked to future generations by altruistic transfers (Barro 1974). This paper makes these transfers explicit by using an overlapping generations model with altruistic parents that invest in the human and financial wealth of their children (OLGA-model). In environments with and without uncertainty, we establish conditions under which the model (i) exhibits endogenous growth and (ii) behaves differently than the oo-model. In addition we examine how growth rates respond to fiscal policies that involve intergenerational and intragenerational redistributions of wealth, features ignored by the literature using the oo-model. The essential insight behind the difference between the OLGA-model and the ci&-model is given by Drazen (1978) and Becker (1981). Their model assumes overlapping generations, where each household is headed by altruistic parents that may affect their children's well being through transfers of both human capital and financial assets (referred to as 'bequests'). Legal restrictions constrain the bequests to be non-negative; parents cannot leave legally binding debt to their children. If it is optimal for the household to make human capital investments and leave non-negative bequests, then the model behaves as if the household is infinitely-lived. However, if the desired bequest is negative and the legal restriction binds, then parents only make transfers in the form of human capital investments. When households are bequest-constrained the model posseses many of the characteristics of the standard overlapping generations model without altruism. In particular, lump sum intergenerational transfers carried out by the government can have real effects (despite the presence of altruistic human capital transfers (Drazen 1978)).

Educational attainment of children from single-parent families: Differences by exposure, gender, and race

This article examines the effect of living in a single-parent family on educational attainment by gender and race. According to household production theory, the reduction in parental resources for human capital investment in children living in a single-parent family should lower their educational attainment. Using matched mother-daughter and mother-son samples from the National Longitudinal Surveys, we constructed precise measures of the age and length of time a child lived in a single-parent family. Empirical findings show that the negative effect of living in a single-parent family (1) increases with the number of years spent in this type of family, (2) is greatest during the preschool years, and (3) is larger for boys than girls.

The consumption tax in the presence of altruistic cash and human capital bequests with endogenous fertility decisions

We provide an analysis of the consumption tax policy in the presence of cash bequests, human capital investments in children, and endogenous fertility decisions. It is shown that the consumption tax is no longer neutral if the tax rate is constant over the taxpayer's life cycle, labor supply is exogenous, and the parent expects the offspring to pay the same tax rate, if the number of children is chosen optimally by the parent. Neutrality breaks down because the shadow prices of both bequests and fertility are interlinked; it is more expensive to produce a child the larger either bequest is and it is more expensive to make a bequest of either type to each child the larger the number of children produced. Several examples are provided where imposing the consumption tax induces an increase in the number of children produced and a decrease in net capital formation.