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Correlation, Consumption, Confusion, or Constraints: Why Do Poor Children Perform So Poorly?

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

No 20153, University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers from University of Western Ontario, Centre for Human Capital and Productivity (CHCP)

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 inf uence 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.

Date: 2015
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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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