Parental Beliefs about Returns to Different Types of Investments in School Children

Abstract

In this paper, we study parental beliefs about the returns to different types of investments in school children. Using a representative sample of 1,962 parents in England, we document how parents perceive the returns to parental time investments, material investments and school quality, as well as the complementarity/substitutability between the different inputs. Both parental investments and school quality are perceived to be important and returns are perceived to be diminishing with higher investments. We further find that parental material investments are perceived as more productive if the child attends a high quality school. We find no differences in perceived returns to investments by the child's initial human capital or gender and, surprisingly, by the parents' socioeconomic background. We document a high degree of heterogeneity in perceived returns across respondents and document that perceived returns are highly correlated with actual investment decisions made by parents.

Early Childhood Human Capital Formation at Scale

“…The visits can also reinforce the message on complementarities in investments in stimulation and nutrition which, our analysis suggests, is a key mechanism. This offers concrete directions for new research that can further experiment with the design of such programs with emphasis on understanding parental beliefs about the human capital production function (Cunha et al, 2013;Attanasio et al, 2020;Giannola, 2021).…”

Parental Beliefs, Perceived Health Risks, and Time Investment in Children: Evidence from COVID-19

“…First, we follow Boneva and Rauh (2018) and Attanasio, Boneva, and Rauh (2020), and compute perceived returns and risks for each respondent i. We do so by comparing each individual's answer in the scenario where the level of investment is high, with the corresponding answer in the scenario where the level of investment is low, while holding fixed the levels of all other inputs.…”

Preschool Quality and Child Development

“…Our paper speaks most directly to another strand on misperceptions about the production technology of child development itself. We build on work exploring how perceptions (and misperceptions) over the relative importance of different types of inputs shape investment choices (Cunha, Elo, and Culhane, 2013;Caucutt et al, 2017;Boneva and Rauh, 2018;Attanasio, Cunha, and Jervis, 2019;Attanasio, Boneva, and Rauh, 2020a;Cunha, Elo, and Culhane, 2020). We then introduce a new type of misperception that we argue may be particularly important in our context -that over the comparative advantage of the different actors (in our case, teachers and TAs) in the child development process which can lead to gains from specialization not being fully exploited.…”