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Towards causal estimates of children's time allocation on skill development

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  • Gregorio Caetano
  • Josh Kinsler
  • Hao Teng

Abstract

In this paper we examine how children's time allocation affects their accumulation of cognitive skill. Children's time allocation is endogenous in a model of skill production since it is chosen by parents and children. We apply a recently developed test of exogeneity to search for specifications that yield causal estimates of the impact time inputs have on child skills. The test exploits bunching in time inputs induced by a nonnegativity time constraint and it has power to detect a variety of sources of endogeneity. We find that with a sufficiently rich set of controls we are unable to reject exogeneity in our most detailed production function specifications. The estimates from these specifications indicate that active time with adult family members, such as parents and grandparents, are the most productive in generating cognitive skill.

Suggested Citation

  • Gregorio Caetano & Josh Kinsler & Hao Teng, 2019. "Towards causal estimates of children's time allocation on skill development," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 34(4), pages 588-605, June.
    • Handle: RePEc:wly:japmet:v:34:y:2019:i:4:p:588-605
    DOI: 10.1002/jae.2700
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