Periodic Reporting for period 3 - SKILLPOV (SKILLPOV)
Reporting period: 2019-09-01 to 2021-02-28
Our proposal is motivated by three main problems concerning the relationship between poverty and skill formation. First, the recent literature on the economics of education suggests that the main reason why schools in poor areas have low quality is because they have ineffective teachers. More generally, this research emphasizes that what happens inside the classroom is what most affects learning, focusing in particular in the roles of teachers and peers. This research has uncovered strong evidence of the importance of teachers for learning (e.g. Hanushek and Rivkin, 2012), and mixed evidence for the importance of peers (e.g. Epple and Romano, 2011). Little is known however about the mechanisms through which teacher and peer influences operate, since they often appear as a black box. The projects in this proposal will uncover new evidence about the sources of heterogeneity in teacher quality (namely through the close observation of classroom level interactions), and the complementarity or substitutability of different quality teachers across grades. We also examine to what extent peer effects can be driven by a “rotten apple” model, and how peer effects can be generated from the interaction between incentives to compete across students and classroom heterogeneity.
The quality of formal learning institutions may be especially important for poor children at early ages. There are examples of very successful high quality centre based programs, with long lasting impacts on the lives of children, although these are generally very small programs (e.g. Elango et al, 2015). The challenge is to replicate their success at scale, in large networks of public child care centres. Moreover, public day care centres generally serve a dual role: they foster the development of young children, and they allow mothers additional time to work. There is some evidence that, in the short run, public day care centres may be successful in both dimensions. What is not known is whether these effects (on child development and maternal labour supply) persist past the ages that children attend day care. Furthermore, when formal child care is shown to affect child development, one cannot say whether if improvements in child outcomes are due to the direct impact of attending child care, or if they come through the indirect impact of increased home resources. We investigate both these questions.
Second, there are strong associations between parental socio-economic status and the development of their offspring both in the short and the long run, starting with the literature on intergenerational transmission (e.g. Black and Devereux, 2010). But what is central for policy design, and researchers have not yet quantified, is the relative importance of different drivers of this relationship over the life of the child: resources, information, technology, or preferences. In opening what is yet again a black box, we explore two main lines of research. First, we examine in detail the role of intra-household decision processes in determining health and educational investments in children, drawing from the recent literature on collective models of household consumption and labour supply (Browning et al, 2014). Second, we study how imperfect information about effective parenting practices and about the returns to investments in human capital of children, influences the quantity and quality of parental investments, and in turn, child development.
Third, although many welfare services are available for the poor, they often have low take-up rates, even when they can contribute to significant changes in the lives of poor families and their children. Two of the most cited reasons for low take-up are imperfect information and stigma. For both reasons, we expect take-up decisions to be strongly affected by social interactions. There exists some evidence that an individual’s welfare participation is correlated with the participation rate of individuals she is likely to interact with. But we do not know precisely how social influences cascade through one’s social network, and how this depends on whether social effects come mainly through information or stigma.
Finally, we also provide a new look at the poverty and inequality reducing role of the minimum wage. Most research focuses on small changes in the minimum wage, which cannot be expected to have substantial effects on poverty. They are not informative about how the large cross country differences in minimum wages affect inequality across countries. We will study an unusually large minimum wage change in Hungary, corresponding to the difference between the French and US minimum wages. From this analysis we will be able to understand how large movements in the minimum wage can affect inequality.
The research described in this proposal answers a general call for uncoupling the different economic forces driving teacher quality, socio-economic gradients in development, and the effectiveness of poverty alleviation policies. This can only be done with a combination of better data, with detailed measurements of these forces, and richer models that explicitly consider the role of preferences, information, constraints, technology, and social networks. We next describe in detail the individual projects included in this proposal.
The quality of formal learning institutions may be especially important for poor children at early ages. There are examples of very successful high quality centre based programs, with long lasting impacts on the lives of children, although these are generally very small programs (e.g. Elango et al, 2015). The challenge is to replicate their success at scale, in large networks of public child care centres. Moreover, public day care centres generally serve a dual role: they foster the development of young children, and they allow mothers additional time to work. There is some evidence that, in the short run, public day care centres may be successful in both dimensions. What is not known is whether these effects (on child development and maternal labour supply) persist past the ages that children attend day care. Furthermore, when formal child care is shown to affect child development, one cannot say whether if improvements in child outcomes are due to the direct impact of attending child care, or if they come through the indirect impact of increased home resources. We investigate both these questions.
Second, there are strong associations between parental socio-economic status and the development of their offspring both in the short and the long run, starting with the literature on intergenerational transmission (e.g. Black and Devereux, 2010). But what is central for policy design, and researchers have not yet quantified, is the relative importance of different drivers of this relationship over the life of the child: resources, information, technology, or preferences. In opening what is yet again a black box, we explore two main lines of research. First, we examine in detail the role of intra-household decision processes in determining health and educational investments in children, drawing from the recent literature on collective models of household consumption and labour supply (Browning et al, 2014). Second, we study how imperfect information about effective parenting practices and about the returns to investments in human capital of children, influences the quantity and quality of parental investments, and in turn, child development.
Third, although many welfare services are available for the poor, they often have low take-up rates, even when they can contribute to significant changes in the lives of poor families and their children. Two of the most cited reasons for low take-up are imperfect information and stigma. For both reasons, we expect take-up decisions to be strongly affected by social interactions. There exists some evidence that an individual’s welfare participation is correlated with the participation rate of individuals she is likely to interact with. But we do not know precisely how social influences cascade through one’s social network, and how this depends on whether social effects come mainly through information or stigma.
Finally, we also provide a new look at the poverty and inequality reducing role of the minimum wage. Most research focuses on small changes in the minimum wage, which cannot be expected to have substantial effects on poverty. They are not informative about how the large cross country differences in minimum wages affect inequality across countries. We will study an unusually large minimum wage change in Hungary, corresponding to the difference between the French and US minimum wages. From this analysis we will be able to understand how large movements in the minimum wage can affect inequality.
The research described in this proposal answers a general call for uncoupling the different economic forces driving teacher quality, socio-economic gradients in development, and the effectiveness of poverty alleviation policies. This can only be done with a combination of better data, with detailed measurements of these forces, and richer models that explicitly consider the role of preferences, information, constraints, technology, and social networks. We next describe in detail the individual projects included in this proposal.
Since the beginning of this grant we have 6 papers published or forthcoming in major journals: 1) Measuring and Changing Control: Women’s Empowerment and Targeted Transfers (Economic Journal, 2018), 2) Tackling Social Exclusion: Evidence from Chile (Economic Journal, 2019), 3) School Grants and Education Quality: Experimental Evidence from Senegal (Economica, forthcoming), 4) Optimal Data Collection for Randomized Control Trials (Econometrics Journal, forthcoming), 5) Who pays for the minimum wage (American Economic Review, forthcoming), 6) Do public health interventions crowd out private health investments? Malaria control policies in Eritrea (Labour Economics, 2017). We have 3 additional papers which are at the revise and resubmit stage: 7) Intergenerational Mobility and the Timing of Parental Income (Journal of Political Economy), 8) The Effect of Gender Targeted Conditional Cash Transfers: Evidence from a Randomized Control Trial (Economic Journal), 9) Please Call me John: Name Choice and the Assimilation of Immigrants in the United States, 1900-1930 (Labour Economics). Finally, we completed more than 10 other working papers, several of them already submitted, and we have several papers under preparation. These papers were presented at seminars and conferences, too numerous to mention in detail. Here we discuss, in particular, the following ones: 10) Experimental Estimates of the Education Production Function: Sensitive Periods and Dynamic Complementarity; 11) Free Access to Child Care, Child Development, and Female Labour Supply; 12) Evaluating the Effects of a Large Scale Parenting Intervention in Chile: Nadie es Perfecto; 13) Pre-Natal intervention and Human Capital Accumulation: Experimental Evidence from Households in Extreme Poverty in Northern Nigeria.
There are multiple ongoing papers on the different dimensions of the project. We expect to produce at least 15 new working papers before the end of the project. In addition, we expect at least 8 more published papers in major refereed journals before the end of the project.