Endowments and Investment within the Household: Evidence from Iodine Supplementation in Tanzania
AbstractStandard theories of resource allocation within the household posit that parents’ investments in their children reflect a combination of children’s endowments and parents’ preferences for child quality. We study how changes in children’s cognitive endowments affect the distribution of parental investments amongst siblings, using data from a large-scale iodine supplementation program in Tanzania. We find that parents strongly reinforce the higher cognitive endowments of children who received in utero iodine supplementation, by investing more in vaccinations and early life nutrition. The effect of siblings’ endowments on own investments depends on the extent to which quality across children is substitutable in parents’ utility functions. Neonatal investments, made before cognitive endowments become apparent to parents, are unaffected. Fertility is unaffected as well, suggesting that inframarginal quality improvements can spur investment responses even when the quantity-quality tradeoff is not readily observable.
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Bibliographic InfoPaper provided by Economic Growth Center, Yale University in its series Working Papers with number 998.
Length: 46 pages
Date of creation: Jun 2011
Date of revision:
endowments; intra-household; child health; Tanzania;
Find related papers by JEL classification:
- I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
- I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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