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Parental Quality Investment, Child Effort, and Human Capital Accumulation

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  • Salvador Contreras

Abstract

This paper develops a theoretical model that explores the effects of child investment on human capital accumulation. Household investment effects are measured as a function of quality of investment choices, time allocation, child effort, and spillover effects. The theory dynamics are derived by employing a two-period OLG model. The model dynamics reveal the existence of multiple steady states of quality investment and child human capital accumulation under two stages of development. These dynamics show why poor households are often unable to escape poverty. Empirically, the theory and dynamics are tested with United States data. The data suggest that for poor households, income and parental human capital have no significant effect on child performance at school. Child effort and parental quality investment are shown to be significant determinants of child performance at school across household types.

Suggested Citation

  • Salvador Contreras, 2010. "Parental Quality Investment, Child Effort, and Human Capital Accumulation," International Economic Journal, Taylor & Francis Journals, vol. 25(3), pages 387-417, June.
    • Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:387-417
    DOI: 10.1080/10168737.2010.505246
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    Cited by:

    1. Chetan Ghate & Gerhard Glomm & John T. Stone, 2014. "Public and private expenditures on human capital: Accumulation in India," Discussion Papers 14-04, Indian Statistical Institute, Delhi.
    2. Chetan Ghate & Gerhard Glomm & John T. Stone, 2014. "Public and private expenditures on human capital: Accumulation in India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 14-04, Indian Statistical Institute, New Delhi, India.

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