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The development and happiness of very young children


The paper demonstrates how Sen’s (Commodities and capabilities. Amsterdam, North-Holland, 1985) alternative approach to welfare economics can be used to shed light on the wellbeing of very young children. More specifically, we estimate versions of the three key relations from his framework using data from the German Socio-Economic Panel (SOEP) Survey. Our primary models provide evidence that skills are related to involvement in cognate activities with a parent, indicating a behavioural relationship between capabilities and activities which is not explicit in Sen’s original set-up, but is key to the development and happiness of young children. A second set of models indicates that the daily activities of very young children are related to household income but that in some cases the association with parenting inputs is stronger. Thirdly, we report happiness regressions for the children which seem to suggest that shopping and reading are valued but that their distribution is limited in some cases—probably either by household income or parental education. Across the piece, we find that the number of siblings is negatively related to activity involvement with parents, as hypothesised by Becker, but positively related to everyday, motor and social skills. Combined with evidence from other studies, we conclude that the capability approach provides a useful framework for understanding the economics of wellbeing across the entire life course.

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Fig. 1


  1. 1.

    We use the terminology ‘happiness’ somewhat loosely here. To be more precise, various related conceptions have been studied. These typically range from more evaluative measures such as ‘overall life satisfaction,’ to affective, hedonic measures such as how ‘happy’ one feels today (e.g. Diener et al. 2009). Eudaimonic measures of wellbeing have also been proposed (e.g. White and Dolan 2009). For a recent discussion in the context of welfare economics, see also Frey and Stutzer (2012).

  2. 2.

    The term “experienced utility” was coined by Kahneman et al. (1997) to describe the Benthamite conception of utility upon which the happiness literature is ultimately founded.

  3. 3.

    These findings have been largely corroborated and extended in a number of notable related studies. For example, Cunha and Heckman (2008) discovered that parental inputs have different effects at different stages in the child’s life-cycle, with cognitive skills being more affected at early ages and non-cognitive skills more at later ages. Cunha et al. (2010) found that for most types of disadvantage it is optimal to invest more in the early stages of childhood than in later stages.

  4. 4.

    For further important studies in this area see Aizer and Cunha (2012), Carneiro et al. (2013) and Duflo (2012). Conti and Heckman (2014) provide an excellent overview of the emerging field.

  5. 5.

    Some of the key concepts of the capabilities approach have also recently been applied to the analysis of child wellbeing by Phipps (2002), Tommaso (2007), Addabbo and Di Tommaso (2011) and Volkert and Wüst (2011).

  6. 6.

    There is certainly some evidence for this in the child development literature. For example, Whitehurst and Lonigan (1998) have discussed the beneficial impact of a variety of activities on the early stage development of reading ability. These include increasing children’s experience with picture books and other literacy materials, dialogic reading, exposure to activities such as alphabet boards, learning to print their names and playing rhyming games. In a study of children aged 3–4 years, MacDonald and Parke (1984) found that physical play and engagement between fathers and children and verbal interactions between mothers and children were positively related to children’s social skills, especially for boys. The extent of verbal instructions from the mother was positively linked with their daughters’ social skills; in contrast, paternal verbal instructions were negatively associated with social skills for both genders.

  7. 7.

    The functionings data available in this study are ordinal, reflecting the frequency with which various activities are performed. We choose to adopt the richer domain \({\mathbb {R}}_+^n\) of rather than \({\mathbb {Z}}_+^n\). This is partly to elucidate the framework in its full generality. However, it is also more consistent theoretically with our subsequent use of ordered probit models.

  8. 8.

    We adopt \(\mathbb {R}^{s}\) as the capabilities domain rather than \(\mathbb {N}^{s}\) for similar reasons to those discussed in footnote 7 in the context of functionings.

  9. 9.

    In Sen (1985a)’s formulation, the capability set is defined as the set of all functionings that an individual is free to engage in, given their resources and abilities.

  10. 10.

    Very occasionally a father is interviewed instead of a mother. This is the case in just 4 of our 815 observations. For simplicity, we ignore this from here on and refer to all respondents as ‘mothers.’ For further information about SOEP (2012), see Wagner et al. (2007).

  11. 11.

    Each year, this component of the SOEP (2012), entitled “Your Child at the Age of 2–3 Years,” is asked to mothers who had a child born three calendar years previously. For example, the 2007 survey contains data on children born anytime between \(1{\mathrm{st}}\) January 2004 and \(31{\mathrm{st}}\) December 2004.

  12. 12.

    As usual with household survey data, it is important to bear in mind the possibility of declaration bias. There is a sizeable literature, particularly, on the misreporting of income in surveys—for example to avoid the risk of being required to make tax payments. In some of the more subjective data in this dataset, such as child abilities or happiness as assessed by the mother, we posit that there is likely to be less bias than in income variables, but perhaps more noise.

  13. 13.

    The order in the SOEP (2012) data-set actually runs in the other direction. We reversed the order for convenience.

  14. 14.

    The five sub-dimensions for each of the four broad categories of skills are described in Appendix A.

  15. 15.

    There is no option in the survey for ‘living with partner as if married’.

  16. 16.

    In Appendix E we also include a variable on size of home in estimations of Eq. (2).

  17. 17.

    There are, of course, many aspects of the external environment which could play a role here. Inevitably, we are constrained to some extent by the available data. A variable on respondents’ overall perception of neighbourhood quality, ‘Good neighbourhood,’ was available in the SOEP (2012) but, unfortunately, only for 2007 so we were forced to omit this from our main analyses. However, analogous results for our estimation of Eq. (2) are reported with this variable included in Appendix E.

  18. 18.

    The dependent variable in our version of (2) is ‘child happiness.’ We estimate a number of versions of (1) where the dependent variable in each case is one of the nine ordinal functionings variables. We also estimate a number of versions of (4), where the dependent variable \(q_{ij}\) is taken to be \(Q_i^{talk}\), \(Q_i^{eskills}\), \(Q_i^{move}\) or \(Q_i^{social}\).

  19. 19.

    OLS regressions were also run and yielded very similar results, as is often the case.

  20. 20.

    A link test is a popular type of RESET test, developed by Pregibon (1979) and based on an earlier idea by Tukey (1949). We use link tests to test for misspecification in our various estimations of (1), (2) and (4).

  21. 21.

    As a robustness check, analogous regressions to our functionings models reported in Table 2, but which control for reporting style using data on mother’s happiness, were run. The results are qualitatively very similar and are deferred to Appendix C.

  22. 22.

    Both AIC and BIC are found to decrease from models 1 through to 4, and to increase very marginally in model 5.

  23. 23.

    We are particularly grateful to one of the referees for raising this point.

  24. 24.

    There was also a marginally significant positive association between child happiness and hours spent being cared for by grandparents, and a marginally significant negative association with hours spent in daycare.

  25. 25.

    It is also possible, of course, that the finding is a reporting effect related to the more positive subjective scales among East German mothers. That explanation is not, however, very consistent with the fact that the East Germany coefficient is actually most significant in the 2SLS regression.

  26. 26.

    Similar lines of argument could be applied to the positive association with the mother being an immigrant.

  27. 27.

    A similar issue occurs where the capability indicator is closely related, by definition, to engagement in the activity. For example, the movement skills index has a component ‘m3-Climbs up playground climbing equipment and other high playground structures.’ Achievement of this skill, by definition, necessitates trips to the playground. Similarly, the movement skills index contains a component ‘m4-Cuts paper with scissors,’ which by definition necessitates some involvement in arts and crafts.

  28. 28.

    The theme is fast becoming a leitmotiv in the literature. Chevalier and Marie (2015) for example conclude that there is a need for very early stage interventions whilst noting the identification of children at risk is difficult given that parenting style is rarely observed. However, given the data analysed here, we would be more optimistic that indicators of parenting style, whilst not perfect, could usefully be developed for use in clinical settings, to the benefit of parents and child professionals alike.

  29. 29.

    Similar results have been found for Italy by Addabbo et al. (2014).


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Corresponding author

Correspondence to Laurence Roope.

Additional information

The authors wish to thank Conal Smith, Ron Smith, Peter Hammond, Vasiliki Totsika, Sarah Cattan, Mariacristina De Nardi as well as participants of Royal Economic Society and OECD-universities research conferences and university seminars in Oxford, York, Sheffield and Turin. We are also grateful to two referees for a series of excellent comments, the Leverhulme Trust for funding much of this research, Amartya Sen for supporting the project of which the paper is part and Jim Heckman for being a member of its advisory board. The usual caveat applies.

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Anand, P., Roope, L. The development and happiness of very young children. Soc Choice Welf 47, 825–851 (2016).

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  • Social Skill
  • Welfare Economic
  • Capability Approach
  • Picture Book
  • Order Probit Model