It Takes a Village: The Economics of Parenting with Neighborhood and Peer Effects

70 Pages Posted: 21 Apr 2020

See all articles by Francesco Agostinelli

Francesco Agostinelli

University of Pennsylvania

Matthias Doepke

Northwestern University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Giuseppe Sorrenti

University of Zurich

Fabrizio Zilibotti

Yale University; Centre for Economic Policy Research (CEPR)

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Date Written: April 18, 2020

Abstract

As children reach adolescence, peer interactions become increasingly central to their development, whereas the direct influence of parents wanes. Nevertheless, parents may continue to exert leverage by shaping their children’s peer groups. We study interactions of parenting style and peer effects in a model where children’s skill accumulation depends on both parental inputs and peers, and where parents can affect the peer group by restricting who their children can interact with. We estimate the model and show that it can capture empirical patterns regarding the interaction of peer characteristics, parental behavior, and skill accumulation among US high school students. We use the estimated model for policy simulations. We find that interventions (e.g., busing) that move children to a more favorable neighborhood have large effects but lose impact when they are scaled up because parents’ equilibrium responses push against successful integration with the new peer group.

Suggested Citation

Agostinelli, Francesco and Doepke, Matthias and Sorrenti, Giuseppe and Zilibotti, Fabrizio, It Takes a Village: The Economics of Parenting with Neighborhood and Peer Effects (April 18, 2020). Cowles Foundation Discussion Paper No. 2228, Available at SSRN: https://ssrn.com/abstract=3579206 or http://dx.doi.org/10.2139/ssrn.3579206

Francesco Agostinelli

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

Matthias Doepke

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

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

Giuseppe Sorrenti

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Fabrizio Zilibotti (Contact Author)

Yale University ( email )

New Haven, CT 06520
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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