Working Paper: NBER ID: w22233
Authors: Jessica Leight; Elaine M. Liu
Abstract: The importance of non-cognitive skills in determining long-term human capital and labor market outcomes is widely acknowledged, but relatively little is known about how educational investments by parents may respond to non-cognitive skills early in life. This paper evaluates the parental response to variation in non-cognitive skills among their children in rural Gansu province, China, employing a household fixed effects specification; non-cognitive skills are defined as the inverse of both externalizing challenges (behavioral problems and aggression) and internalizing challenges (anxiety and withdrawal). The results suggest that on average, parents invest no more in terms of educational expenditure in children who have better non-cognitive skills relative to their siblings. However, there is significant heterogeneity with respect to maternal education; less educated mothers appear to reinforce differences in non-cognitive skills between their children, while more educated mothers compensate for these differences. Most importantly, there is evidence that these compensatory investments lead to catch-up in non-cognitive skills over time for children of more educated mothers.
Keywords: Maternal Education; Parental Investment; Noncognitive Skills; Rural China
JEL Codes: D13; I24; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Maternal education (I24) | Parental investment (J13) |
| Parental investment (J13) | Noncognitive skills (G53) |
| Maternal education (I24) | Noncognitive skills (G53) |
| Sibling noncognitive skills (G53) | Parental investment (J13) |
| Parental investment (J13) | Catch-up in noncognitive skills (J24) |