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Environmental Incentives and Parental Investments

Author

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  • Renske Stans

Abstract

This paper analyses how a family's economic environment influences parental investments in children's development. Worsening economic conditions can incentivize parental investments by raising the importance of human capital accumulation in ensuring later-life success. Using a large representative German survey, in a regional and time- fixed e ffects setting, I estimate the causal impact of the local unemployment rate on parental investment measures. I find that a rise in the unemployment rate increases measures of maternal support, academic interest and homework assistance. Furthermore, heterogeneity analysis suggests that the responsiveness of parenting behavior on economic incentives di ffers by parental and child background characteristics such as parental locus of control and secondary school track.

Suggested Citation

  • Renske Stans, 2020. "Environmental Incentives and Parental Investments," CRC TR 224 Discussion Paper Series crctr224_2020_205, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2020_205
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp205
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    More about this item

    Keywords

    parenting; human capital; regional labor market;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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