Should Children Do More Enrichment Activities? Leveraging Bunching to Correct for Endogeneity

61 Pages Posted: 12 Jun 2020

See all articles by Carolina Caetano

Carolina Caetano

University of Georgia

Gregorio Caetano

University of Georgia

Eric Reed Nielsen

Board of Governors of the Federal Reserve System

Date Written: May, 2020

Abstract

We study the effects of enrichment activities such as reading, homework, and extracurricular lessons on children's cognitive and non-cognitive skills. We take into consideration that children forgo alternative activities, such as play and socializing, in order to spend time on enrichment. Our study controls for selection on unobservables using a novel approach which leverages the fact that many children spend zero hours per week on enrichment activities. At zero enrichment, confounders vary but enrichment does not, which gives us direct information about the effect of confounders on skills. Using time diary data available in the Panel Study of Income Dynamics (PSID), we find that the net effect of enrichment is zero for cognitive skills and negative for non-cognitive skills, which suggests that enrichment may be crowding out more productive activities on the margin. The negative effects on non-cognitive skills are concentrated in higher-income students in high school, consistent with elevated academic competition related to college admissions.

JEL Classification: C24, I20, I21, J01

Suggested Citation

Caetano, Carolina and Caetano, Gregorio and Nielsen, Eric Reed, Should Children Do More Enrichment Activities? Leveraging Bunching to Correct for Endogeneity (May, 2020). FEDS Working Paper No. 2020-036, Available at SSRN: https://ssrn.com/abstract=3624929 or http://dx.doi.org/10.17016/FEDS.2020.036

Carolina Caetano (Contact Author)

University of Georgia ( email )

Athens, GA 30602-6254
United States

Gregorio Caetano

University of Georgia ( email )

Athens, GA 30602-6254
United States

Eric Reed Nielsen

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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