Changes in Parental Assets and Children's Educational Outcomes

Abstract

Several countries, including Canada, Singapore and the United Kingdom, have enacted asset-based policies for children in recent years. The premise underlying these policies is that increases in assets lead to improvement in various child outcomes over time. But little existing research examines this premise from a dynamic perspective. Using data from the NLSY79 mother and child datasets, two parallel process latent growth curve models are estimated to examine the effects of parental asset accumulation on changes in children's achievements over six years during middle childhood. Results indicate that the initial level of assets is positively associated with math scores, but not reading scores, while faster asset accumulation is associated with changes in reading scores, but not in math scores. Overall, the results suggest that the relationship between assets and various child outcomes may not be straight-forward. Different dimensions of the asset experience may lead to different outcomes, and the same dimension may also have different effects. Implications for future research and for asset-based policies are discussed.

The effect of parental wealth on children’s outcomes in early adulthood

“…These studies provide strong empirical evidence of a positive link between parental wealth and educational achievement, both in terms of schooling outcomes during childhood (Loke and Sacco, 2010;Zhan and Sherraden, 2003), 2 and in terms of postsecondary educational attainment (Conley, 2001;Pfeffer and Hällsten, 2012;Lovenheim, 2011). The magnitude of the estimated effects is quite substantial.…”

Optimizing the “demographic dividend” in young developing countries: The role of contractual savings and insurance for financing education

“…A plausible explanation is that savings raise children's and/or parental educational expectations and raised expectations may lead to increased children's academic efforts and/or parental involvement, leading in turn to improved educational outcomes (Elliott, Kim, Jung, & Zhan, ; Ssewamala et al., ; Zhan, ). Overall empirical studies indicate that assets have a positive association with educational outcomes (Elliott et al., ; Grinstein‐Weiss, Yeo, Irish, & Zhan, ; Loke & Sacco, ).…”

Household assets, academic expectations, and academic performance among Ghanaian junior high school students: Investigating mediation

“…Findings suggest that assets-owned mostly by parents-are positively associated with children's grades (Elliott & Beverly, 2010;Kim, 2010;Loke & Sacco, 2011). One primary association is that assets allow people to afford education services such as after-school classes and school supplies, but we do not fully understand the empirical connection in Ghana.…”

“…Students' performances in math and English language or reading subjects are used consistently as proxies for overall academic performance in other studies in Ghana and elsewhere (Chowa, Masa, Wretman, and Ansong, 2013;Loke & Sacco, 2011;Zhan, 2006). Each endogenous variable is a global score for students' continuous assessment (30%) and final examination (70%) scores.…”