Working Paper: CEPR ID: DP18424
Authors: Daniela Del Boca; Christopher J. Flinn; Ewout Verriest; Matthew Wiswall
Abstract: We construct a dynamic model of child development where forward-looking parents and children jointly take actions to increase the child’s cognitive and non-cognitive skills within a Markov Perfect Equilibrium framework. In addition to time and money investments in their child, parents also choose whether to use explicit incentives to increasethe child’s self-investment, which may reduce the child’s future intrinsic motivation to invest by reducing the child’s discount factor. We use the estimated model parameters to show that the use of extrinsic motivation has large costs in terms of the child’s future incentives to invest in themselves
Keywords: Time Allocation; Child Development; Parenting Styles
JEL Codes: J13; D1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| conditional cash transfers (CCTs) (F35) | increased short-term cognitive skills in children (I21) |
| conditional cash transfers (CCTs) (F35) | reduced intrinsic motivation to invest in own development (D29) |
| parental educational attainment (I24) | effectiveness of conditional cash transfers (CCTs) (F35) |
| household income (D19) | effectiveness of conditional cash transfers (CCTs) (F35) |
| parental investment decisions (G11) | child cognitive and noncognitive outcomes (I21) |
| child cognitive and noncognitive outcomes (I21) | parental investment decisions (G11) |