Multigenerational Human Capital: How Grandparents Drive Cognitive Development Across Generations

Do grandparents continue to play a vital role in their grandchildren’s lives even in societies where child health is no longer a primary concern? This study explores how the involvement of grandparents, traditionally associated with reproductive success, has evolved to support human capital formation. Drawing on the human capital framework, we rigorously model both grandparental and parental investments, examining their joint effects on cognitive development over time. Additionally, we explore how early nutritional status and cognitive abilities may influence subsequent investments. Using longitudinal data from the Young Lives study, which tracks children in Ethiopia, India, Vietnam, and Peru, we model the joint effect of support from grandparents and parental investments on children’s cognitive ability. We find that early childhood investments have a lasting impact on developmental outcomes. Our results demonstrate that grandparents’ involvement significantly enhances cognitive development in early childhood, with effects reaching nearly half the magnitude of parental investments. Moreover, these early influences indirectly shape cognitive outcomes later in childhood. Notably, their contribution amounts to half a year of schooling indirectly in Ethiopia, one-quarter in India, and around one month in Peru and Vietnam.