Children's Human Capital Research Articles

The fall and rise of parental financial investments during the COVID‐19 pandemic

AbstractObjectiveThis research note investigates changes in American parents' financial investments in children during the COVID‐19 pandemic, as well as whether and how changes in parents' spending varied based on parental education.BackgroundParents purchase goods, experiences, and services that shape children's human capital and life chances. Socioeconomic differences in parental expenditures on children represent an important pathway for perpetuating inequality across generations. The COVID‐19 pandemic disrupted children's lives in ways that may have changed these levels of investment.MethodThe 2015–2022 Consumer Expenditure Survey (CEX) is used to describe spending on five key categories of investments in children's human capital (educational spending, extracurricular activities and lessons, computers and tablets, formal childcare, informal childcare) overall and by parental education. Mediation analysis assesses the extent school closures explain these changes.ResultsChildcare and extracurricular expenditures initially decreased significantly and then gradually recovered to pre‐pandemic levels by the end of 2021. Cutbacks were primarily among more educated families. However, spending on schooling increased in 2021 and computer and tablet purchases spiked in 2020, particularly among more educated families. Mediation analysis suggests that when expenditures were most affected by the pandemic (in 2020), school closures explained 50%–70% of those changes.ConclusionThis note provides evidence that during the pandemic socioeconomic inequalities in child‐related spending decreased in some categories of spending (e.g., childcare and extracurriculars) and increased in others (e.g., computers and tablets). Many changes appeared short‐term, but changes in education point to possible longer‐term shifts in parents' preferences about children's educational environments.

Family Planning and Children's Human Capital: Experimental Evidence From Urban Malawi

We conduct a randomized controlled trial that provides pregnant and immediate postpartum women with improved access to family planning through counseling, free transportation to a clinic, and financial reimbursement for family planning services over two years. We study the effects of our intervention on child growth and development outcomes among 1,034 children born to participating women directly before the intervention rollout. We find that children born to mothers assigned to the family planning intervention arm were 0.28–0.34 standard deviations taller for their age and 10.7–12.0 percentage points less likely to be stunted within a year of exposure to the intervention. Children born to mothers assigned to the intervention arm also scored 0.17–0.20 standard deviations higher on a caregiver-reported measure of cognitive development after two years of intervention exposure. Although the nonmeasurement of children is a challenge in our study, our estimates are robust to multiple methods of correcting for potential attrition bias. Our results are consistent with models of fertility that link couples’ fertility decisions to child health and human capital. Our results also suggest that improved access to family planning might have positive downstream effects on child health beyond contraceptive use and fertility outcomes.

Peer effects of local students on the human capital of migrant children in middle schools: Evidence from China

The role of peer effects in children's human capital accumulation has attracted increased amounts of attention. Using data from a nationally representative survey of Chinese middle school students, this paper exploits random student-classroom assignment as a quasi-natural experiment to identify the peer effects of local students on the human capital of migrant children in Chinese middle schools. The results indicate that the peer effects of local students significantly improve the human capital of migrant children, including academic performance, cognitive abilities and non-cognitive abilities. Moreover, these peer effects can be further explained by improved parent-child relationships and parental expectations, increased student effort and expectations, and optimized teachers' teaching and school climate. Additionally, the peer effects from local students varies with migrant children's gender, Hukou, number of siblings and grade. Our research contributes to complementing the research field regarding peer effects and provides a new policy-oriented direction for the development of migrant children's human capital.

Uniform agricultural tax abolition and differential household labor supply: Evidence from China's urban household survey

Uniform government public policy has steadily shaped the labor supply from households in the past few decades in China with possible differential impact on each parent. This paper investigates how uniform tax policy change plays differential roles in household's labor supply through government public education spending. Utilizing the exogenous shock from China's agricultural tax abolition in 2005, we find that the abolition results in a reduction in female employment but an increase in male employment. Specifically, a 1% increase of agricultural tax to public revenue ratio in the reference year leads to a 0.485% labor supply reduction and 1.50 fewer hours of work per month for married women, whereas the married men's labor supply increases by 0.191% and their working hours by 1.06 h in a typical urban family with school-going children. The effects are greater on married women with primary school-age children and married men from high-asset households. Our mechanism analysis indicates that public education spending works as a substitute for private education spending and affects the household labor supply through investment in children's human capital. Our findings offer a new perspective on the decreasing female labor supply and the widening employment gap between (married) women and (married) men in the Chinese labor market. The findings suggest that public tax policy could lead to unintended consequences on household's labor supply decisions, and thus exacerbate the gender employment gap in the labor market.

Spatial and emotional distances in parent-child relationships: Impacts on human capital development in rural Chinese boarding children

BackgroundThe policy of merging remote rural elementary schools into centralized villages has led to the emergence of boarding schools as an essential means of providing compulsory education in rural areas of China. As boarding children reside in schools for extended periods, parents' influence on their human capital development is inevitably specificity. The development of rural boarding children is a serious social issue in China, and parent–child distance plays a crucial role in affecting the development of children's human capital. ObjectiveWhile previous studies have focused on the relationship between parental absence and the development of human capital in rural boarding children, this study examines the effects of both spatial and emotional distance between parents and children on the human capital of rural boarding children. Participants and settingA stratified, multi-stage probabilities proportional to size (PPS) sampling method was used, and self-report questionnaires were completed by 2397 rural boarding children (54.2 % males; ages 12 to 18, M = 14.66, SD = 1.30). MethodsChildren's background, family, and school and teacher characteristics were used as control variables. An OLS regression model was used to assess the effects of parent–child spatial and emotional distance on the human capital of rural boarding children, and a CMP–OLS regression model was used to address endogeneity using parents' self-assessed family economic conditions as instrumental variables. ResultsParent–child spatial distance had a significant positive effect (p < 0.05, p < 0.05), and emotional distance had a significant negative effect (p < 0.05, p < 0.01) on the cognitive and non-cognitive abilities development of rural boarding children. Living with grandparents heightened the negative effect on non-cognitive abilities development. ConclusionsThe findings of this study strengthen the link between parent–child distance and rural boarding children and the moderating impact of living with grandparents on the effect of parent–child distance on rural boarding children's human capital providing new insights for promoting the development of rural boarding children. It also highlights the detrimental effects of emotional neglect on rural boarding children's development. This is important for realizing China's rural revitalization strategy and the healthy development of disadvantaged children in rural areas.

Effect of class size on student achievement in the COVID‐19 “new normal”

ABSTRACTThe COVID‐19 pandemic implied measures, such as school closures at the outbreak of the pandemic, negatively affected children's human capital. However, in some places, the situation later resulted in a reduction in class sizes in order to avoid the spread of SARS‐Cov‐2 in schools. We take advantage of this unexpected event to evaluate the effect on school performance of a significant class size reduction implemented in Spain, when schools were reopened. We find a positive and significant effect of the class size reduction of 0.11 standard deviations on overall students' performance. Given the situation and nature of our data, we interpret our estimates as a lower bound for the true effect of the reduction in class size. We conclude that the reduction in class size served, on average, to at least compensate for the other negative effects on learning. Our findings also point out the importance of evaluating the quality of the new and inexperienced additional teachers that need to be hired when implementing a general reduction of class size.

ІНСТИТУТ ОБУМОВЛЕНИХ СОЦІАЛЬНИХ ТРАНСФЕРТІВ: У ПОШУКАХ ПІДВИЩЕННЯ ЕФЕКТИВНОСТІ СОЦІАЛЬНОГО ЗАХИСТУ В УКРАЇНІ

Розглянуто інститут обумовлених соціальних трансфертів, інституціалізація якого сприятиме підвищенню ефективності соціальної політики України і покращенню якості людського капіталу. Обґрунтовано важливість їх застосування в соціальній політиці України. Визначено позитивні й дискусійні аспекти даного інструменту в межах соціального захисту населення. Сформовано пропозиції стосовно розвитку інклюзивної функції соціального захисту, що сприятиме збільшенню можливостей соціалізації у різних сферах життя, нагромадженню людського капіталу і підвищенню соціальної мобільності шляхом розвитку інституту обумовлених соціальних трансфертів, під якими розуміється грошова допомога, яка надається як засіб боротьби з бідністю, вирівнювання доходів і підвищення ступеня соціальної інклюзії домогосподарств з обов’язковими умовами її використання. Визначено умови витрачання допомоги, які доцільно впровадити в соціальному захисті в Україні для посилення інклюзивної функції, серед яких освіта, культура, спорт, інвестиції у людський капітал дітей, вплив на склад споживання продуктів харчування, медичне обслуговування, придбання ліків, стимулювання споживання товарів і послуг вітчизняного виробництва, участь у активних програмах зайнятості, суспільно-корисній діяльності. Запропоновано впроваджувати таку вимогу для отримання соціальної допомоги працездатними членами суспільства як участь у програмах зайнятості державних органів зайнятості населення. Визначено, що інституціалізація соціального захисту населення працездатного віку має відбуватись у бік посилення сенситивності зв’язку між соціальними внесками, доступом до соціальних благ і соціальним захистом, оскільки людина в такому випадку відчуватиме себе членом суспільства, розраховуючи на захист з боку держави і маючи зацікавленість працювати в умовах формальної зайнятості.

Social externalities of women empowerment: Evidence from suffrage movements of late nineteenth and early twentieth century United States

AbstractPrevious literature suggests that empowering women is associated with children's improved outcomes. However, little is known about its effects on children's later‐life crime and incarceration. We argue that women empowerment through suffrage law changes during the late nineteenth and early twentieth centuries in the US generated incentives for women to invest in their children's human capital. The accumulated human capital then has the potential to reduce future incarceration of children. We use full‐count censuses 1920–1930, implement a difference‐in‐difference framework, and empirically show that childhood exposure to suffrage laws is associated with considerable reductions in incarceration. The effects appear to be primarily driven by decreases in male and Black incarceration. The balancing tests rule out the concern that the effects are driven by demographic compositional changes or endogenous changes in other state‐level characteristics. Furthermore, an event‐study analysis rejects the concern that the effects are driven by preexisting trends in incarceration among exposed cohorts. The findings of this research note offer informative implications for overlooked externalities of women empowerment in a historical setting.

Crossbred poultry adoption and impact: Evidence from Ethiopia

Growing efforts to achieve improved family poultry signify the importance of adoption and livelihood impact studies of crossbred poultry in Ethiopia. We employ the second panel Ethiopian Socioeconomic Survey (ESS) to study the determinants of crossbred poultry adoption and its significance for household well-being. Results show that female poultry managers, constrained in other productive livelihood options, are more likely to adopt crossbred poultry. Households that are relatively wealthier in terms of human resources, assets, and dwelling conditions are more inclined to adopt crossbred poultry. Access to advisory services, experience with other crossbred animals, and the size of the agricultural land are among other significant determinants. Concerning well-being outcomes, crossbred poultry adoption increases egg sales and revenue. The sample does not provide sufficient evidence to conclude any impact on food, non-food consumption, or investment in children's human capital. Predicted revenue from an extra layer chicken in crossbreed adopting households triples the predicted revenue from egg sales in local breed keeping households. Increasing average flock size twice by crossbred birds could generate an annual revenue equal to at least 10% of yearly consumption expenditure. These results suggest that flock sizes in rural family poultry production should be increased with more crossbred birds to sustain livelihoods significantly.

The long-term and intergenerational effects of early-life hunger experience on human capital and labor market outcomes

Using individual-level retrospective data on early-life hunger experience from China, we investigate the long-term effects of early nutritional deprivation on one's own and adult children's human capital and labor market outcomes. With an instrumental variable approach, we find that hunger experience lowers educational attainment and job quality of the first generation. But this negative impact on human capital does not transmit to the second generation, possibly due to parents' compensatory behavior of human capital investment and extra attention given to children. Our findings imply that the negative impact of non-extreme nutritional adversities on human capital and labor market outcomes are likely to decrease over generations.

Spillover Effects of Immigration Policies on Children's Human Capital

Spillover Effects of Immigration Policies on Children's Human Capital

Export Expansion and Investment in Children's Human Capital: Evidence from the U.S.-Vietnam Bilateral Trade Agreement

Export Expansion and Investment in Children's Human Capital: Evidence from the U.S.-Vietnam Bilateral Trade Agreement

Family Planning and Children's Human Capital: Experimental Evidence from Urban Malawi

Family Planning and Children's Human Capital: Experimental Evidence from Urban Malawi

Strategic Human Capital Investment in Second-Generation Children and Return Migration

In this paper, we argue that return migration needs to be analyzed by taking the interdependent location choice of the parent and the child into account. We formulate a model featuring a one-person household with his offspring, where parent decides the human capital investment of the child and the child determines the migration strategy and the frequency of attention to provide to his parent. We introduce the asymmetric assimilation of the generations such that child receives a preference shock in favor of the host country. Empirically testable predictions are derived from the model. Parents with weak preferences over home country intend to stay and invest more in their children's human capital. Decreasing human capital investment leads to an increase in the probability of return for both the child and the parent. A higher cost of attention in case of separation decreases the probability of family members to be separated. The predictions of the model are tested using father-child pairs in the German Socio-Economic Panel. The estimates suggest that fathers who intend to return send their children to low-track secondary schools. This effect is even more prominent for daughters. There is a negative impact of upper secondary school track enrollment on the return migration when the child becomes an adult. Child's preference over host country has a negative impact on return migration of both. Long distance to the country of origin and poor health status of the father are associated with a lower probability of father-child pair being separated.

Childhood Medicaid Eligibility and Human Capital

Although a sizeable literature studies the effect of Medicaid on health, less is known about its effects on education. We use a discontinuity in Medicaid eligibility based on date of birth and administrative school records to study the effects of expanded Medicaid eligibility during middle childhood, between the ages of 8 and 11. We evaluate effects of this Medicaid expansion on outcomes measured a few years later when the children are 12-14 years old. We find that it is associated with a significant increase in the grade that children are in and a reduction in the likelihood that a child is below grade for age. We do not find any evidence for effects on documented disabilities or absences. Our results underscore that Medicaid has important effects on children's human capital.

Human Capital Development and Inter-Generational Income Mobility

Two Models are developed to analyze how would human capital development and inter-generational income mobility be affected when cognitive skills are differentiated from non-cognitive skills and multistage development are considered. The close link between human capital of children and parents would still be present although parenting skills are uncorrelated with parental incomes.Inter-generational income mobility would be lower if parenting skills and the quality of public education (which is assumed to be free and equally accessed by every individual till late childhood) are higher due to dynamic complementary effect in the process of multistage development. In the presence of strong impact of parents’ traits on both cognitive and non-cognitive skills of children, the relationship between human capital of parents and that of children becomes much complicated, so would be the analysis of inter-generational income mobility and poverty trap as now both composition and level of parent’s human capital matter.

Maternal subjective expectations about the technology of skill formation predict investments in children one year later

A growing literature reports significant socio-economic gaps in investments in the human capital of young children. Because the returns to these investments may be huge, parenting programs attempt to improve children’s environments by increasing parental expectations about the importance of investments for their children’s human capital formation. We contribute to this literature by investigating the relevance of maternal subjective expectations (MSE) about the technology of skill formation in predicting investments in the human capital of children. We develop and implement a framework to elicit and analyze MSE data. We launch a longitudinal study with 822 participants, all of whom were women in the second trimester of their first pregnancy at the date of enrollment. In the first wave of the study, during pregnancy, we elicited the woman’s MSE. In the second wave, approximately one year later, we measured maternal investments using the Home Observation for the Measurement of the Environment (HOME) Inventory. The vast majority of study participants believe that the Cobb–Douglas technology of skill formation describes the process of child development accurately. We observed substantial heterogeneity in MSE about the impact of human capital at birth and investments in child development at age two. Family income explains part of this heterogeneity in MSE. The higher the family income, the higher the MSE about the impact of investment in child development. We find that a one-standard-deviation of MSE measured at pregnancy is associated with 11% of a standard deviation in investments measured when the child is approximately nine months old.

Losing the future: Household wealth from urban housing demolition and children's human capital in China

Some literature observes the negative but not very significant effect of household wealth growth on children's educational outcomes. This surprising finding is not easily reconciled with the traditional explanation that relaxed economic constraints caused by wealth growth can promote human capital accumulation. This paper proposes an alternative explanation for the causal relationship between wealth growth and human capital, which could be negative: individuals tend to reduce human capital investment following the decline in their labor supply induced by wealth growth, given that investing in human capital is mainly for employment competitiveness. This explanation is supported by evidence from the case of urban housing demolition in China, in which affected households could obtain substantial wealth growth by considerable demolition compensation thanks to the real estate boom in China. Specifically, using two nationally representative datasets, we find that Chinese households that have experienced demolition relatively have more wealth, less labor supply, lower propensity to accumulate children's human capital, and consequently, have children with lower educational achievement. These results suggest that China's economy may be losing its momentum because of the decline in labor supply and human capital accumulation brought about by the ongoing large-scale urban housing demolition.

The Supply And Demand Of Status By Skill Levels

We determine how the supply and demand of hierarchically ranked agents within a status system affect its population and income inequalities. The supplies of high and low status agents are determined by parents who optimally choose investments in their children's human capital. The incentive of high status parents is to help their children maintain their own high status, while lower status parents are incentivized to help their children achieve higher status. Given that status is scarce and desireable, the parents naturally engage in a Nash-Cournot game. The solution of the supply problem yields a population complement-subtitute relationship between human capital investment and innate endowments; it requires either complementarity for one status type and substitution for the other status type as functions of the exogenous factors, never the same for both status types. The demand side under perfect insight is restricted to socio-economic systems in which differential skill levels determine status differentials (Acemoglu-Autor (2011). The solution of the combined supply and demand status model gives the main contribution of the present paper: a micro theory of skill-based status income inequality. Assuming high and low status agents are technological substitutes, the income of high status agents exceeds that of low status agents; and that inequality grows the larger is the relative relative population supply. The last section of the paper introduces uncertainty or luck due to statistical sampling by characterizing the relative population of status types as a Markov chain governed by a binomial distribution. It turns out that luck plays a larger role (compared to income inequality under perfect insight) in determining income inequality when two types of status agents are technolgical subtitutes than when they are technological complements.

The Impact of Working Mothers’ Bargaining Power on Their Children's Human Capital in Indonesia

Education is one of the strongest instruments owned by society to reduce poverty and vulnerability. This is because knowledge and skills are acquired through education. Thus, increasing productivity and creating access to employment opportunities. So that income will increase along with the increase in education. The most strategic target in developing quality human resources is children. There is an empirical study of the effect on household resource allocation where household decisions are influenced by the power that individuals have in the household. The distribution of power within the household can affect the level of spending on education for each child. This study aims to determine the impact of working mothers on their children's human capital in Indonesia and the differences in the influence of relative education and the relative income of working mother on children's human capital in Indonesia. The analysis technique used is the Ordinary Least Square (OLS) and Chow-test to determine the difference in the effect of the relative education and relative income of working mothers on their children's human capital in Indonesia. Using IFLS5 data, we found out that the impact of working mothers has a significant effect on children's human capital in Indonesia and there is a significant difference where the income of working mothers has a greater influence on children's human capital in Indonesia.