Parental Preference, Heterogeneity, and Human Capital Inequality
In this article, I provide an empirical account of the human capital investment behavior of parents in the face of endowment differences among siblings. The data set used contains a three-wave panel of 4,030 individuals. The article presents a rare case in which endowments are measured explicitly. Health endowments are estimated from dynamic health production functions, while educational endowments are obtained from test scores. The simple score of the standard Raven's Colored Progressive Matrix (CPM) test is used to measure educational endowments. I use estimation procedures that combine an instrumental variables method with panel data estimators to control for endogeneity and heterogeneity. The results suggest that parents compensate for initial differences in health but reinforce initial educational differences among siblings. Hence, an educational subsidy aimed at reducing inequality may end up reinforcing the inequality that might exist in the absence of such subsidy. When parents invest more educational human capital in the able children, an educational subsidy aimed at reducing inequality may end up reinforcing the inequality that might exist in the absence of such subsidy. The same cannot be said about health.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 53 (2005)
Issue (Month): 2 (January)
|Contact details of provider:|| Web page: http://www.journals.uchicago.edu/EDCC/|
When requesting a correction, please mention this item's handle: RePEc:ucp:ecdecc:y:2005:v:53:i:2:p:381-407. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.