Latent Human Capital: How Early Investments in Parents Buffer Against Future Schooling Shocks

Do early investments in parents pay off even when treatment effects for children appear to fade out quickly? We answer this question by leveraging a field experiment in which households with 3-5 year-old children were randomized into a parenting program, a preschool, or a control group, combined with a natural experiment (Covid-19 school closures) that occurred ten years later. Prior to the closures, treatment effects on academic achievement had faded to zero across all groups. Yet, with Covid-19 school closures, effects of the parenting program re-emerge: test scores in control and preschool groups drop by roughly 0.25-0.30 SD, whereas scores in the parenting group drop by only 0.11 SD (difference: p = 0.01). Our findings suggest that parenting programs can generate latent human capital that only becomes visible when complementary school inputs are removed. This result is consonant with parental and school investments acting as substitutes in skill production. Because this latent parental capacity pays off precisely when school inputs fail, standard measurement tools for early childhood programs can miss crucial state-contingent value.