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Estimating the Returns to Parental Time Investment in Children Using a Life Cycle Dynastic Model

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Models of dynastic households have been traditionally used to analyze persistence in earnings and wealth across generations, more recently to study patterns of wealth and fertility, transfers to children and education choices. Using data of two generations from the PSID, this paper develops and estimates a dynastic life-cycle model with endogenous fertility, labor supply and inter-generational transfers. Specifically, individuals choose fertility, labor supply and time investment in children sequentially. The focus of the empirical applications is on the effect of parental time investment on children's labor market outcomes, and the quantity-quality trade-offs involved in fertility decisions across education groups, and households' characteristics.

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  • Georg-Levi Gayle & Limor Golan & Mehmet A. Soytas, "undated". "Estimating the Returns to Parental Time Investment in Children Using a Life Cycle Dynastic Model," GSIA Working Papers 2011-E18, Carnegie Mellon University, Tepper School of Business.
    • Handle: RePEc:cmu:gsiawp:-1615014062
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    1. Massimiliano Bratti & Mendola, M., 2013. "GINI DP 63: Parental Health and Child Schooling!," GINI Discussion Papers 63, AIAS, Amsterdam Institute for Advanced Labour Studies.
    2. Xiaodong Fan & Hanming Fang & Simen Markussen, 2015. "Mothers' Employment and Children's Educational Gender Gap," NBER Working Papers 21183, National Bureau of Economic Research, Inc.

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