(CERGE-EI Working Paper Series No. 616, CERGE-EI), March 2018 with Liyousew G. Borga
Abstract:
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.
Author:
Dr Myroslav Pidkuyko, Research Economist at the DG Economics, Statistics and Research (Microeconomic Studies Division) at Banco de España. Honorary member and researcher of AEI. Research interests are in Macroeconomics, Asset Pricing, Time Series Econometrics, and Family Economics.