Working Paper: NBER ID: w26678
Authors: Qing Hu; Ross Levine; Chen Lin; Mingzhu Tai
Abstract: What is the impact of regulatory reforms that enhance credit market efficiency on children’s human capital? Using a parent-child panel dataset, we find that such reforms reduced children’s academic performance in low-income families. Consistent with the view that financial development entices low-income parents to substitute out of childrearing and into employment with adverse effects on children’s education, we find that among low-income families, regulatory reforms: increased mother’s employment hours, reduced parental supervision and parent-child discussions about school and college, and had bigger adverse effects when mothers were not already working full-time and grandparents were not living with the child.
Keywords: Credit Market Efficiency; Children's Human Capital; Parental Employment; Bank Deregulation
JEL Codes: G28; I21; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Regulatory reforms (G18) | Increased maternal employment hours (J22) |
| Increased maternal employment hours (J22) | Reduced parental supervision and engagement with children (J12) |
| Reduced parental supervision and engagement with children (J12) | Children's academic performance (I21) |
| Increased maternal employment hours (J22) | Decreased parental monitoring of children (J13) |
| Decreased parental monitoring of children (J13) | Children's educational outcomes (I21) |
| Bank deregulation (G28) | Decreased parent-child discussions about school and college (I24) |
| Bank deregulation (G28) | Children's academic performance (I21) |