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

Orazio Attanasio, Teodora Boneva and Christopher Rauh

No 25513, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Parental investments as well as school quality are important determinants of children’s later-life outcomes. In this paper, we shed light on what determines parental investments and study how parents perceive the returns to parental time investments, material investments and school quality, as well as the complementarity/substitutability between the different inputs. Using a representative sample of 1,962 parents in England, we document that parents perceive the returns to 3 hours of weekly parental time investments or £30 of weekly material investments to matter more than moving a child to a better school. Parents perceive the returns to time and material investments to be diminishing and perceive material investments as more productive if children attend higher quality schools. Perceived returns do not differ with the child’s initial human capital or gender and, surprisingly, we find no differences in perceived returns by the parents’ socioeconomic background. Consistent with parental beliefs playing an important role in parental investment decisions, perceived returns are found to be highly correlated with actual investment decisions.

JEL-codes: I24 I26 J13 J24 J62 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-ltv and nep-neu
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Published as Orazio Attanasio & Teodora Boneva & Christopher Rauh, 2022. "Parental Beliefs about Returns to Different Types of Investments in School Children," Journal of Human Resources, vol 57(6), pages 1789-1825.

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Working Paper: Parental Beliefs about Returns to Different Types of Investments in School Children (2018)
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