TY - JOUR

T1 - Reinforcement or Compensation?

T2 - Parental Responses to Children’s Revealed Human Capital Levels in Ethiopia

AU - Fan, Wei

AU - Porter, Catherine

PY - 2020/1/31

Y1 - 2020/1/31

N2 - A small but increasing body of literature finds that parents invest in their children unequally. However, the evidence is contradictory, and providing convincing causal evidence of the effect of child ability on parental investment in a low-income context is challenging. This paper examines how parents respond to the differing abilities of primary school-age Ethiopian siblings, using rainfall shocks during the critical developmental period between pregnancy and the first three years of a child’s life to isolate exogenous variation in child ability within the household, observed at a later stage than birth. The results show that on average parents attempt to compensate disadvantaged children through increased cognitive investment. The effect is significant, but small in magnitude: parents provide about 3.9% of a standard deviation more in educational fees to the lower-ability child in the observed pair. We provide suggestive evidence that families with educated mothers, smaller household size, and higher wealth compensate with greater cognitive resources for a lower ability child.

AB - A small but increasing body of literature finds that parents invest in their children unequally. However, the evidence is contradictory, and providing convincing causal evidence of the effect of child ability on parental investment in a low-income context is challenging. This paper examines how parents respond to the differing abilities of primary school-age Ethiopian siblings, using rainfall shocks during the critical developmental period between pregnancy and the first three years of a child’s life to isolate exogenous variation in child ability within the household, observed at a later stage than birth. The results show that on average parents attempt to compensate disadvantaged children through increased cognitive investment. The effect is significant, but small in magnitude: parents provide about 3.9% of a standard deviation more in educational fees to the lower-ability child in the observed pair. We provide suggestive evidence that families with educated mothers, smaller household size, and higher wealth compensate with greater cognitive resources for a lower ability child.

U2 - 10.1007/s00148-019-00752-7

DO - 10.1007/s00148-019-00752-7

M3 - Journal article

VL - 33

SP - 233

EP - 270

JO - Journal of Population Economics

JF - Journal of Population Economics

SN - 0933-1433

IS - 1

ER -