Parental investment responses to a low birth weight outcome: who compensates and who reinforces?
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This study analyzes how parental investment responds to a low birth weight (LBW) outcome and finds important differences in investment responses by maternal education. High school dropouts reinforce a LBW outcome by providing less investment in the human capital of their LBW children relative to their normal birth weight children whereas higher educated mothers compensate by investing more in their LBW children. In addition, an increase in the number of LBW siblings present in the home raises investment in a child, which is consistent with reinforcement, but this positive effect tends to be concentrated among high school dropouts. These results suggest that studies analyzing the effects of LBW on child outcomes that do not account for heterogeneity in investment responses to a LBW outcome by maternal education may overestimate effects of LBW on child outcomes for those born to low-educated mothers and underestimate such effects for those born to high-educated mothers.
KeywordsParental investment Human capital Low birth weight Education Income
JEL ClassificationD13 I14 I24 J13
I would like to thank the editor Erdal Tekin and three anonymous referees for very helpful and detailed feedback. This paper previously circulated under the title “Who Compensates and Who Reinforces? Parental Investment Responses to Child Endowment Shocks” and is based on a dissertation chapter that was completed at The Ohio State University. I would like to give special thanks to my dissertation advisor David Blau and my dissertation committee members Audrey Light and Bruce Weinberg for their guidance and support during the early stages of this project. I would also like to thank Jérôme Adda, Christian Dustmann, Belton Fleisher, Trevon Logan, Derek Neal, Matthew Neidell, and Matthias Rieger for valuable comments and suggestions. This paper also benefitted from helpful comments by seminar participants at Cleveland State University, The Ohio State University, and European University Institute, and by conference participants at the 2011 GLASS Research Symposium and 2011 Southern Economic Association Annual Meeting.
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