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Human Capital Production With Parental Time Investment In Early Childhood

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  • Youderian, Xiaoyan

Abstract

This paper considers parental time investment in early childhood as an education input and investigates its relationships with other inputs in their contribution to human capital. I develop a 12-period overlapping generations model where human capital formation is a multistage process. The model is calibrated to the US economy so that the generated data matches patterns in parental education spending and child care time. The estimation results show that time input is complementary to education expenditure. I apply the model by implementing three early education policies. The first two involve more government spending and the third is paid parental leave. The policy experiments show that adopting paid parental leave is the most costly means of increasing human capital. An education subsidy is more effective than a direct increase in government spending at promoting human capital; however, its impact on earnings inequality and persistence is smaller.

Suggested Citation

  • Youderian, Xiaoyan, 2019. "Human Capital Production With Parental Time Investment In Early Childhood," Macroeconomic Dynamics, Cambridge University Press, vol. 23(4), pages 1504-1527, June.
    • Handle: RePEc:cup:macdyn:v:23:y:2019:i:04:p:1504-1527_00
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    Cited by:

    1. Minchul Yum, 2023. "Parental Time Investment And Intergenerational Mobility," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 187-223, February.
    2. Iacopo Morchio, 2022. "Policies for Early Childhood Skills Formation: Accounting for Parental Choices and Noncognitive Skills," Bristol Economics Discussion Papers 22/755, School of Economics, University of Bristol, UK.
    3. Xiaoyan Chen Youderian, 2018. "On parental care and home production," Economics Bulletin, AccessEcon, vol. 38(1), pages 520-527.
    4. Siew Ling Yew & Shuyun May Li & Solmaz Moslehi, 2024. "Optimal parental leave subsidization with endogenous fertility and growth," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 97-125, January.
    5. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).

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