It is an empirically established fact that parental investments are crucial in determining adult outcomes. Furthermore, government does not have a direct control over investment children receive at home and as a result cannot force parents to invest. Motivated by these observations, this project pursues a broad program at the intersection of macroeconomics and public economics that will both contribute to the theoretical understanding of how public policy should be conducted in order to encourage parental investment and provide practical recommendations that can be used by policymakers around the world.
The first and the main objective of this proposed research is to understand how taxation and social security systems should be jointly designed with income support programs to provide parents with incentives to invest in their children.
The second objective of this project is to understand how schooling subsidies should be designed in the presence of parental investments that are (1) hard to monitor and (2) complementary to schooling in determining adult outcomes.
The third objective of the proposed research is to answer the questions raised in the first two objectives taking into account that parental investment is crucial in shaping children’s non-cognitive skills as well as cognitive skills.