Not Playing Favorites: Parents and the Value of Equal Opportunity

Jim Berry, Rebecca Dizon-Ross and Maulik Jagnani

No 18917, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We conduct a pair of experiments to identify the value that parents place on equality of opportunity when investing in their children. The first is a real-stakes, lab-in-the-field experiment in a lower-income country and the second a hypothetical, online survey experiment in multiple higher-income countries. The experiments exogenously vary the short-run returns to educational investments to identify how much parents care about equalizing "opportunity" (the investment in each child) relative to maximizing "returns" (total household earnings) or to equalizing "outcomes" (child-level expected earnings). We show that while parents in both experiments place some weight on maximizing returns, they also display a strong preference for equalizing opportunities and are willing to forgo roughly 15-45% of their potential earnings to do so. We find that parents in the higher-income countries also care about equalizing outcomes, while parents in the lower-income country do not.

Date: 2024-03
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