Policies for Early Childhood Skills Formation: Accounting for Parental Choices and Noncognitive Skills

Iacopo Morchio

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: What are the returns in terms of children's skills development to child allowance policies? Answering this question requires a theory of the tradeoffs faced by households, as well as a realistic technology of skills formation. I build a model of parental choices which embeds the technology of cognitive and noncognitive skills formation estimated by Cunha et al. (2010), featuring risky investment in children, time use trade-offs, idiosyncratic income risk and borrowing constraints. Accounting for noncognitive skills implies higher effectiveness of parental investments, and therefore higher policy returns than previously estimated in the literature.

Date: 2022-01-21
New Economics Papers: this item is included in nep-dge and nep-neu
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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:22/755

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