Actors in the Child Development Process

80 Pages Posted: 26 Feb 2019

See all articles by Daniela Del Boca

Daniela Del Boca

University of Turin - Department of Economics; IZA Institute of Labor Economics; Centre for Household, Income, Labour and Demographic Economics (CHILD)

Christopher J. Flinn

New York University -Leonard N. Stern School of Business - Department of Economics; IZA Institute of Labor Economics

Ewout Verriest

New York University (NYU)

Matthew Wiswall

University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 2019

Abstract

We construct and estimate a model of child development in which both the parents and children make investments in the child’s skill development. In each period of the development process, partially altruistic parents act as the Stackelberg leader and the child the follower when setting her own study time. We then extend this non-cooperative form of interaction by allowing parents to offer incentives to the child to increase her study time, at some monitoring cost. We show that this incentive scheme, a kind of internal conditional cash transfer, produces efficient outcomes and, in general, increases the child’s cognitive ability. In addition to heterogeneity in resources (wage offers and non-labor income), the model allows for heterogeneity in preferences both for parents and children, and in monitoring costs. Like their parents, children are forward-looking, but we allow children and parents to have different preferences and for children to have age-varying discount rates, becoming more “patient” as they age. Using detailed time diary information on the allocation of parent and child time linked to measures of child cognitive ability, we estimate several versions of the model. Using model estimates, we explore the impact of various government income transfer policies on child development.

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Suggested Citation

Del Boca, Daniela and Flinn, Christopher J. and Verriest, Ewout and Wiswall, Matthew, Actors in the Child Development Process (February 2019). NBER Working Paper No. w25596. Available at SSRN: https://ssrn.com/abstract=3341257

Daniela Del Boca (Contact Author)

University of Turin - Department of Economics ( email )

Via Po, 53
Torino, 10124
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Household, Income, Labour and Demographic Economics (CHILD)

Turin, TO
Italy

Christopher J. Flinn

New York University -Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ewout Verriest

New York University (NYU) ( email )

Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States

Matthew Wiswall

University of Wisconsin - Madison - Department of Economics ( email )

William H. Sewell Social Science Building
1180 Observatory Drive
Madison, WI 53706-1393
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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