Parental Investments, Social Interventions and Children Outcomes

Stefano Mosso

There is diffused evidence that more than 50 percent of the factors contributing to earnings inequality over the life-cycle are already present at age 18. My research focuses on analyzing how these factors are shaped by parental and social investments in children.

My first research project concerns the relationship between parental investments and the timing of procreation. The current economics literature has focused on the determinants of parental investments, on modeling how these affect the process of accumulation of children’s human capital and on emphasizing the importance of the early years. Most of the attention, however, has been devoted to analyze what happens once a child is born. In my research, I account for the role of endogenous fertility decisions and study how these are potentially affected by parental financial constraints. As children require investments and the fertile years usually coincide with the beginning of the working life where parents are more likely to be constrained, procreation might be optimally delayed to reduce the risk of facing financial constraints during the most sensitive years of child development. This adds another dimension to the standard “quantity” versus “quality” tradeoff of Becker and Lewis: families might be limited in the amount of high quality children they have not only because of the resource constraint, but also because of a biological age related constraint. Credit constraints and, therefore, the timing of parental income, might not directly affect child development (as often found in the literature), but, my model shows, they affect parental utility by delaying procreation and reducing the number of children per couple compared to an unconstrained optimum.

My second research project focuses on studying how long term outcomes of early childhood interventions can be predicted even when only short term outcome measurements and treatment effects are available. The capacity to assess the long run effects in a common metric (such as adult earnings) is crucial for policy evaluation as, first, it allows to compare interventions even when different short term outcomes are measured and, second, it allows a more meaningful cost-benefit analysis of the various programs.

The Division of the Social Sciences Summer Research Grant greatly helped me in advancing my research. I was able to collect more detailed data for my fertility project from the PSID Child Development Supplement with the help of undergraduate RAs. Moreover, both projects are also intense in the amount of computations they require and I was able to access the proper computing resources and the required software licenses.