Intra-household Resource Allocation: Do Parents Reduce or Reinforce Child Cognitive Ability Gaps?
Do parents invest more or less in their high ability children? We provide new evidence on this question by comparing observed ability differences and observed investment differences between siblings in the NLSY. To overcome endogeneity issues we use sibling differences in handedness as an instrument for cognitive ability differences, since handedness is a strong determinant of cognitive ability. We find that parents invest more in high ability children, with a one standard deviation increase in child cognitive ability increasing parental investments by approximately one-third of a standard deviation. Consequently, differences in child cognitive ability are enhanced by differential parental investments. This finding has important implications for education policy.
|Date of creation:||Aug 2010|
|Publication status:||published in: Demography, 2013, 50 (6), 2187-2208|
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- Del Bono, Emilia & Ermisch, John & Francesconi, Marco, 2008.
"Intrafamily Resource Allocations: A Dynamic Model of Birth Weight,"
IZA Discussion Papers
3704, Institute for the Study of Labor (IZA).
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- Johnston, David W. & Shah, Manisha & Shields, Michael A., 2007. "Handedness, Time Use and Early Childhood Development," IZA Discussion Papers 2752, Institute for the Study of Labor (IZA).
- Johnston, David W. & Nicholls, Michael E. R. & Shah, Manisha & Shields, Michael A., 2010. "Handedness, Health and Cognitive Development: Evidence from Children in the NLSY," IZA Discussion Papers 4774, Institute for the Study of Labor (IZA).
- David S. Loughran & Ashlesha Datar & M. Rebecca Kilburn, 2008. "The Response of Household Parental Investment to Child Endowments," Working Papers 404-1, RAND Corporation.
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