Parental Investment, Human Capital, and Cross-National Differences in Wealth

Abstract

Economists have recently turned to family variables in search of explanations for why the economies of some countries grow more rapidly than others. This research tested the hypothesis that crossnational indicators of parental investment and human capital would be predictive of GNP per capita of 147 countries. Regression analysis found that close to two thirds of the variance in GNP was explained by parental investment factors (including total fertility rates, the adult sex ratio, polygyny, contraception, and school attendance rates). The effects of parental investment/human capital on wealth remained after controlling for climate, geography, endemic diseases, religion, and government policies, even though each of these was predictive of GNP. The data support the hypothesis that wealth differences between countries are associated with human capital differences accruing to differential parental investment.Geography is one of the most important determinants of a country's wealth. Thus, Hall and Jones (1996) found that countries having temperate climates are more prosperous than those lying close to the equator. Kenny (1999) also found that countries having wealthy neighbors were much wealthier than those whose neighbors were poor. Landes (1998) has suggested that greater economic 338

Educational and ecological correlates of IQ: A cross-national investigation

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