Social policies, within-family investments and children’s human capital: four essays in family and education economics
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Abstract
This dissertation consists of four independent chapters contributing to the literature of family and education economics. They study the impact of social policies and within-family investments on family’s human capital and behavior. These chapters are preceded by an introduction outlining the motivation for the investigated research questions and highlighting the shared contributions of the four empirical research chapters. The dissertation concludes with a final chapter that makes policy recommendations, discusses potential limitations, and points towards future research.
Chapter 2 demonstrates that most parents overestimate their children’s skills and performance in school. As parental misperceptions are more frequently found in lessadvantaged families, they can exacerbate educational inequality, since parents’ beliefs about their children’s current performance influence their investments in their children’s skill development. We capitalize on exogenous variation in report card distribution across federal states in Germany to better understand how schools as organizations can communicate with parents. We examine whether information from teachers regarding a child’s performance affects parental beliefs and behavior and if so how this differs by subject and group. Our findings indicate that school information boosts parents’ behavioral investments in child skill-building while having a limited impact on their beliefs. This finding suggests that receiving information from schools can be valuable as it reinforces the importance of educational activities for parents. We further find that numerical information treatments are more impactful than verbal treatments, that subsequent treatments are less potent than the initial treatment, and that school information only boosts parental investment when teachers hold accurate beliefs about children’s skills.
About one in five children across OECD countries lives in single-parent households, many of which receive no financial support from the non-resident parent. To address this, several countries have introduced public advance child support schemes. Chapter 3 investigates the impact of such payments on the financial well-being, labor supply decisions, and household spending patterns of single-parent families, drawing on a major reform to Germany’s advance child support program that substantially expanded both benefit duration and eligibility in 2017. Using representative data from the German Microcensus and the Income and Expenditure Survey, we find these payments to improve families’ financial situations without crowding out private child support. Since eligibility was tied to economic independence of single-parent households, the reform also led to a decrease in the probability of receiving welfare benefits, which appears to be driven by exits from welfare due to increases in labor supply at the intensive rather than the extensive margin. We also find changes in expenditure patterns of affected families, with increased spending on food and beverages as well as goods related to the human capital development and well-being of children.
Chapter 4 analyzes family spillovers of birthright citizenship in Germany. By using difference-in-differences and event study methodologies on large-scale survey datasets, I examine the direct impact of citizenship on immigrant children and its spillover effects on the educational achievements of their older siblings who were born before the reform. The findings reveal educational benefits for immigrant children, and positive spillover effects on their older siblings’ academic achievements. Children are 13 percentage points more likely, and their older siblings are 6 percentage points more likely, to complete secondary school with the highest degree. The spillovers can be attributed to a considerable increase in parental investments in the siblings’ education and increased naturalization of parents and older siblings. Consequently, this study suggests that previous evaluations of citizenship have underestimated its benefits.
Health and well-being in the family context can be affected by care giving arrangements. Following parental care and daycare, grandparents are the third most important care givers for children in many Western societies. Despite the relevance of grandparental care, there is little evidence on the causal effects of this care mode on the next generations’ health and well-being. In Chapter 5, we fill this gap by investigating the causal impact of regular grandparental care on the self-reported health and (domainspecific) satisfaction of both parents and children. To do so, we exploit geographic distance to grandparents as a source of arguably exogenous variation and use representative German panel data for families with children under the age of eleven. Our results suggest positive effects on parental satisfaction with the child care situation, as well as mothers’ satisfaction with their leisure time. However, we also find negative effects on children’s health, particularly for elementary school aged children and for boys.