Environmental Incentives and Parental Investments

Renske Stans

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: This paper analyses how a family's economic environment influences parental investments in children's development. Worsening economic conditions can incentivize parental investments by raising the importance of human capital accumulation in ensuring later-life success. Using a large representative German survey, in a regional and time- fixed e ffects setting, I estimate the causal impact of the local unemployment rate on parental investment measures. I find that a rise in the unemployment rate increases measures of maternal support, academic interest and homework assistance. Furthermore, heterogeneity analysis suggests that the responsiveness of parenting behavior on economic incentives di ffers by parental and child background characteristics such as parental locus of control and secondary school track.

Keywords: parenting; human capital; regional labor market (search for similar items in EconPapers)
JEL-codes: J13 J24 R23 (search for similar items in EconPapers)
Pages: 29
Date: 2020-08
New Economics Papers: this item is included in nep-env, nep-eur and nep-neu
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2020_205

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