NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Children's Program

April 29, 2010
Janet Currie of Columbia University, Organizer

Orazio Attanasio, University College London and NBER, and Katja Kaufmann, IGIER
Educational Choices and Subjective Expectations of Returns to Schooling: Evidence on Intra-Household Decisions and Gender Differences

Attanasio and Kaufmann seek to improve our understanding of human capital investment decisions. They analyze two aspects of this decision process: first, they shed some light on the decisionmaking process within the household by addressing the question "whose expectations matter in schooling decisions, the ones of the parents or the ones of the youths?" and whether this depends on the gender of the youth. Second, they investigate the role of potential determinants of schooling, such as expected monetary returns, perceptions of earnings, and unemployment risk and returns in the marriage market, allowing for differences between boys and girls. The researchers use a dataset of Mexican junior and senior high school graduates that: elicits their own and their parents' beliefs about future earnings for different scenarios of highest schooling degree; contains proxies for returns in the marriage market; and provides information about the actual schooling choice and an extensive set of controls. They find that for boys, both parents' and youths' expectations matter for the high school choice, while only the ones of the youths appear relevant for the college attendance choice. For girls on the other hand, only parents' expectations seem important for both high school and college attendance decisions. While there is no evidence here of important differences in information sets between parents and youths, and boys and girls, the girls do not appear to be less informed about potential returns to schooling than the boys. In this analysis, the authors take into account one determinant that often has been neglected: perceptions of earnings and employment risk for different schooling scenarios. They find that the role of these perceptions depends on the gender of the child as well as on whether the decision is about attending high school or college. For boys, risk perceptions seem be more important in high school decisions and expected returns appear more relevant in college attendance decisions. For girls, risk perceptions appear to be the key determinant of both schooling decisions. This study also provides suggestive evidence that for girls, returns in the marriage market might also be playing a role. These results have important policy implications for the design of programs aimed at increasing schooling, for example in terms of who should receive the conditional cash or fellowship. For the effective design of such programs, it is indispensable to understand whether there are differences in the determinants of schooling choices and differences in the intra-household decision process, depending on the gender of the child.


Carlos Chiapa and Jose Luis Garrido, El Colegio del Mexico, and Silvia Prina, Case Western Reserve University
The Effect of Social Programs and Exposure to Professionals on the Educational Aspirations of the Poor

Investment in human capital is an important tool for reducing poverty. However, the poor may lack the capacity to aspire, which often results in underinvestment in their children's education. Chiapa, Garrido, and Prina study the effect of a social program on the educational aspirations of the poor, and explore the role of exposure to educated professionals as a possible channel for increasing aspirations. First, using differences-in-differences, they show that beneficiary parents of the Mexican antipoverty program PROGRESA have higher educational aspirations for their daughters -- one third of a school year more -- than do non-beneficiary parents; however, there is no significant effect for sons. This corresponds to a 20 percent increase in the proportion of parents who aspire for their daughters to finish college. Next the researchers exploit the design of the program whose requirements cause its target population to have different levels of mandated exposure to doctors and nurses. They show that educational aspirations for daughters from high-exposure households (relative to low-exposure households) in treatment villages (relative to control villages) were half a school year higher six months after the start of the program (relative to before its introduction). These results suggest that the change in aspirations is driven by exposure to highly educated professionals.Finally, a year after the start of the program, the aspirations of parents in low-exposure households catch up with the aspirations of parents in high-exposure households, which suggests that aspirations might be affected by a minimum amount of exposure and not by the frequency of exposure.

Jorge M. Aguero and Maithili Ramachandran, University of California, Riverside
The Intergenerational Effects of Increasing Women's Schooling: Evidence from Zimbabwe

After independence in 1980, the new government of Zimbabwe implemented a substantial reform to correct the racially-segregated educational system inherited from the colonial era. A key element of the reform was the elimination of restrictions to progress from primary to secondary school. Primary school graduates in 1980 entered secondary school at a rate four times higher than those in 1979. Aguero and Ramachandran exploit the fuzzy discontinuity implicit in this natural experiment to test primarily for mother-to-child transmission of education. They find that a one-year increase in the mother's education causes an increase in the children's education by about 5 percent of a standard deviation. They show that these findings are unlikely to be driven by other confounding factors.


David Deming, Harvard University
Better Schools, Less Crime?

Deming estimates the effect of attending a first-choice middle or high school on young adult criminal activity, using data from public school choice lotteries in Charlotte Mecklenburg school district (CMS). Seven years after random assignment, lottery winners have been arrested for fewer serious crimes, and have spent fewer days incarcerated. Lottery winners attended schools that were higher quality according to measures of peer and teacher inputs, as well as revealed preference, and the gain was roughly equivalent to switching from one of the lowest ranked schools to one at the district average. The reduction in crime is concentrated largely in the years after enrollment in the preferred school is complete. The effects are concentrated among African-American males whose ex ante characteristics define them as high risk. As a result the CMS lottery assignment system, which gave priority to disadvantaged applicants, may have reduced crime relative to a simple lottery like those implemented by many U.S. charter schools.


Philip Oreopoulos, University of Toronto and NBER, and Kjell G. Salvanes, Norwegian School of Economics and Business Administration

How Large are the Returns to Schooling? Hint: Money isn't Everything(NBER Working Paper No. 15339)

Oreopoulos and Salvanes explore the many avenues by which schooling affects lifetime well-being. Experiences and skills acquired in school reverberate throughout life, not just through higher earnings. Schooling also affects how much one enjoys work and the likelihood of being unemployed. It leads individuals to make better decisions about health, marriage, and parenting. It also improves patience, making individuals more goal-oriented and less likely to engage in risky behavior. Schooling improves trust and social interaction, and may offer substantial consumption value to some students. The authors discuss various mechanisms to explain how these relationships may occur independent of wealth effects, and present evidence that non-pecuniary returns to schooling are at least as large as pecuniary ones. Ironically, one explanation why some early school leavers miss out on these high returns is that they lack the very same decision making skills that more schooling would help improve.


Jason M. Lindo, University of Oregon
Parental Job Loss and Infant Health

While a number of papers have analyzed the effects of job loss on various measures of health, Lindo is the first to explore the extent to which the health effects extend to the children of displaced workers. More generally, his research sheds light on the causal link between socioeconomic status and infant health, as job displacements can be thought of as providing a plausibly exogenous shock to income. Specifically, he uses detailed work and fertility histories from the Panel Study of Income Dynamics to estimate the impact of parents' job displacements on children's birth weights. These data allow for an identification strategy that essentially compares the outcomes of children born after a displacement to the outcomes of their siblings born before using mother fixed effects. He finds that husbands' job losses have significant negative effects on infant health. They reduce birth weights by approximately four percent with the impact concentrated on the lower half of the birth weight distribution.

 
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