Finance, Social Interactions, and Human Capital Development
35 Pages Posted: 21 Jun 2021
Date Written: June 19, 2021
What is the impact of credit conditions on family interactions and children’s human capital development? We discover that regulatory reforms that ease credit conditions are associated with (1) increases in labor demand and the employment of mothers from low-income families, (2) decreases in parent-child discussions about school, reductions in parental supervision, and increases in children’s TV watching and video game playing among low-income families, and (3) declines in the time that children spend on homework and children’s academic performance among those same families. Effective substitutes for parent-child interactions, such as grandparents living in the household, mitigate these effects.
Keywords: Credit constraints; Social finance; Demand and supply of labor; Human capital accumulation
JEL Classification: G28; G41; J23; J24; I2
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