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Parental involvement and Children's human capital: A tax-subsidy experiment

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  • Gahramanov, Emin
  • Hasanov, Rashad
  • Tang, Xueli

Abstract

Parental time with children has a significant influence on early childhood development, future accumulation of a wide array of cognitive and non-cognitive skills and the ultimate success of the child. The model presented in this article features endogenous fertility and labour supply while distinguishing between various types of parental time spent with children. We conduct a quantitative analysis to investigate the importance of the role of family for children's skill formation. In the model, parents are subsidized for spending publicly verifiable productive time with their children. Such intervention can significantly enhance the human capital of children, yet it affects the overall labour supply of the primary caretaker in an ambiguous way.

Suggested Citation

  • Gahramanov, Emin & Hasanov, Rashad & Tang, Xueli, 2020. "Parental involvement and Children's human capital: A tax-subsidy experiment," Economic Modelling, Elsevier, vol. 85(C), pages 16-29.
    • Handle: RePEc:eee:ecmode:v:85:y:2020:i:c:p:16-29
    DOI: 10.1016/j.econmod.2019.05.002
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    3. Wei, Huaying & Guo, Rui & Sun, Honghao & Wang, Nan, 2021. "Household leverage and education expenditure: the role of household investment," Finance Research Letters, Elsevier, vol. 38(C).
    4. Pan, Zheng & Luo, Yiyang, 2023. "Peers with special needs and students’ noncognitive performance: Evidence from China," Economic Modelling, Elsevier, vol. 125(C).

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    More about this item

    Keywords

    Parental investment; Human capital; Cognitive skills; Non-cognitive skills; Fertility; Labor supply; Optimal control;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D10 - Microeconomics - - Household Behavior - - - General
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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