Human capital growth and poverty: Evidence from Ethiopia and Peru

Abstract

In this paper we use high quality data from two developing countries, Ethiopia and Peru, to estimate the production functions of human capital from age 1 to age 15. We characterize the nature of persistence and dynamic complementarities between two components of human capital: health and cognition. We also explore the implications of different functional form assumptions for the production functions. We find that more able and higher income parents invest more, particularly at younger ages when investments have the greatest impacts. These differences in investments by parental income lead to large gaps in inequality by age 8 that persist through age 15.

Essays on Culture and Early Childhood

“…We interpret this as evidence that parents compensate shocks to the children's skills. Our results are consistent across the literature on non-linear production functions of child abilities (95,98,97,108). In general, the share of parental investment is positive, significant and it increases after ChCC implementation.…”

“…Our selection of measurements was guided by the literature on nonlinear production function of abilities (95,98,97,108) and the availabiltiy of measurement in our dataset. We have standard measurements of child's ability at birth, child's socio-emotional abilities and parental abilities.…”

Human Capital Development and Parental Investment in India

“…9 In a follow up paper to this one we also examine evidence from Peru and Ethiopia. See Attanasio, Meghir, Nix, and Salvati (2017). allow investments to react to time varying unobserved shocks.…”

Essays on Human Capital Formation From Gestation to Adolescence

“…We interpret this as evidence suggesting that educational attainment at age 18 is affected by credit constraints which are present from gestation to age 18 The second figure of the first row of 1.1 looks at the probability of attending a Post-Secondary Institution at age 18 20 . Again, we begin with a picture of past levels of parental income having much higher coefficients when compared to current income.…”

“…In fact, the preceding Pelotas 1982 Birth Cohort Study is the largest and longest running birth cohort study in a developing country (17). Further, previous studies on human capital formation in childhood and adolescence in developing countries have relied on subsets of populations, as (18), (19) and (20) which focuses on poorest families in Colombia, India and Peru and Ethiopia respectively. We have the entire population, not a subset, of all people born in Pelotas, Brazil in 1993.…”