Whoever Has Will Be Given More: Child Endowment and Human Capital Investment (Under Review)
- (CERGE-EI Working Paper Series No. 616, CERGE-EI), March 2018 with Liyousew G. Borga
Using a unique longitudinal survey from Ethiopia, this paper investigates whether resource constrained parents reinforce or attenuate differences in early abilities between their children. To overcome the potential endogeneity associated with measures of endowment, we construct a measure of human capital at birth that is plausibly net of prenatal investments. Furthermore, we estimate a sibling fixed-effects model to reduce the bias due to unobserved family-specific heterogeneity. We find that parents reinforce educational inequality, as inherently healthy children are more likely to attend preschool, be enrolled in elementary school, and have more expenses incurred towards their education. Health inputs, on the other hand, are allocated in a compensatory manner.