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Correlation, Consumption, Confusion, or Constraints: Why do Poor Children Perform so Poorly?

Elizabeth Caucutt (), Lance Lochner () and Youngmin Park

No 2015-005, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: The economic and social mobility of a generation may be largely determined by the time it enters school given early developing and persistent gaps in child achievement by family income and the importance of adolescent skill levels for educational attainment and lifetime earnings. After providing new evidence of important differences in early child investments by family income, we study four leading mechanisms thought to explain these gaps: an intergenerational correlation in ability, a consumption value of investment, information frictions, and credit constraints. In order to better determine which of these mechanisms influence family investments in children, we evaluate the extent to which these mechanisms also explain other important stylized facts related to the marginal returns on investments and the effects of parental income on child investments and skills.

Keywords: social mobility; achievement gap; family investments (search for similar items in EconPapers)
JEL-codes: J60 I00 E24 (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-dem and nep-mac
Note: M
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http://humcap.uchicago.edu/RePEc/hka/wpaper/Caucut ... tion-consumption.pdf First version, March, 2015 (application/pdf)

Related works:
Journal Article: Correlation, Consumption, Confusion, or Constraints: Why Do Poor Children Perform so Poorly? (2017) Downloads
Working Paper: Correlation, Consumption, Confusion, or Constraints: Why do Poor Children Perform so Poorly? (2016) Downloads
Working Paper: Correlation, Consumption, Confusion, or Constraints: Why do Poor Children Perform so Poorly? (2015) Downloads
Working Paper: Correlation, Consumption, Confusion, or Constraints: Why Do Poor Children Perform So Poorly? (2015) Downloads
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