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Socio-Economic Status and Inequalities in Children's IQ and Economic Preferences

Author

Listed:
  • Thomas Deckers

    (University of Bonn)

  • Armin Falk

    (University of Bonn)

  • Fabian Kosse

    (University of Bonn)

  • Pia Pinger

    (Universität Bonn)

  • Hannah Schildberg-Horisch

    (University of Bonn)

Abstract

This paper explores inequalities in IQ and economic preferences between children from high and low socio-economic status (SES) families. We document that children from high SES families are more intelligent, patient and altruistic, as well as less risk-seeking. To understand the underlying causes and mechanisms, we propose a framework of how parental investments as well as maternal IQ and economic preferences influence a child's IQ and preferences. Within this framework, we allow SES to influence both the level of parental time and parenting style investments, as well as the productivity of the investment process. Our results indicate that disparities in the level of parental investments hold substantial importance for SES gaps in economic preferences and, to a lesser extent, IQ. In light of the importance of IQ and preferences for behaviors and outcomes, our findings offer an explanation for social immobility.

Suggested Citation

  • Thomas Deckers & Armin Falk & Fabian Kosse & Pia Pinger & Hannah Schildberg-Horisch, 2017. "Socio-Economic Status and Inequalities in Children's IQ and Economic Preferences," Working Papers 2017-088, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2017-088
    Note: IP
    as

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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Deckers_Falk_Kosse_etal_2017_SES-ineq-IQ-preferences.pdf
    File Function: First version, September, 2017
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    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • 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
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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