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It's all in the stars: The Chinese zodiac and the effects of parental investments on offspring's cognitive and noncognitive skill development

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  • Chih Ming Tan
  • Xiao Wang
  • Xiaobo Zhang

Abstract

Parental investments in children's cognitive and noncognitive outcomes are deeply important to policymakers. However, because parental investments are arguably endogenous, estimating their importance empirically poses a challenge. To address this challenge, this paper exploits a rich and novel dataset, the China Family Panel Studies, and proposes a culture‐specific instrumental variable based on the Chinese zodiac. By comparing the outcomes of children born just before and just after the cutoff for a “lucky” (or ‘unlucky’) zodiac sign, we find that parents' investments have significant effects on offspring's development of both cognitive and noncognitive skills.

Suggested Citation

  • Chih Ming Tan & Xiao Wang & Xiaobo Zhang, 2024. "It's all in the stars: The Chinese zodiac and the effects of parental investments on offspring's cognitive and noncognitive skill development," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(3), pages 877-920, July.
    • Handle: RePEc:wly:ectrin:v:32:y:2024:i:3:p:877-920
    DOI: 10.1111/ecot.12405
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    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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