Human Capital Investments in Children: A Comparative Analysis of the Role of Parent-Child Shared Time in Selected Countries

Abstract

Parents invest in their children's human capital in several ways. We investigate the extent to which the levels and composition of parent-child time varies across countries with different welfare regimes: Finland, Germany and the United States. We test the hypothesis of parent-child time as a form of human capital investment in children using a propensity score treatment effects approach that accounts for the possible endogenous nature of time use and human capital investment. Result: There is considerable evidence of welfare regime effects on parent-child shared time. Our results provide mixed support for the hypothesis that non-care related parent-child time is human capital enriching. The strongest support is found in the case of leisure time and eating time.

Keywords: parent-child time, comparative research, welfare regimes, Finland, Germany, USA, treatment effects, propensity score matching

JEL Classification: D1, J24, J22, H43