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Whoever Has Will Be Given More: Child Endowment and Human Capital Investment

Liyousew G. Borga and Myroslav Pidkuyko

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: Using a unique longitudinal survey from Ethiopia, we investigate whether resource constrained parents reinforce or attenuate differences in early abilities between their children. We propose a simple model that allows for sibling interactions. To overcome the endogeneity associated with measures of endowment, we construct a measure of human capital at birth that is plausibly net of prenatal investment. We estimate a sibling fixed-effect model to account for bias due to unobserved family-specific heterogeneity. We find that parents reinforce educational inequality: inherently healthy children are more likely to attend preschool, be enrolled in elementary school, and have more expenses incurred towards their education. Health inputs are allocated in a compensatory manner.

Keywords: cognitive ability; health endowment; intrahousehold allocation; sibling rivalry (search for similar items in EconPapers)
JEL-codes: D13 I14 I24 J13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu and nep-ure
Date: 2018-03
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