Raising Charitable Children: The Effects of
Verbal Socialization and Role-modeling on
Children’s Giving
Mark Ottoni-Wilhelm ∗ Ye Zhang
David Estell † Neil Perdue ‡
∗ IU
∗
Lilly Family School of Philanthropy and
Department of Economics (IUPUI)
† Indiana
University Bloomington
‡ University
of Indianapolis
Spring School on Generosity and Well-Being, University of
Warwick - April 9-11, 2013
Motivation
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Voluntary contributions to charitable organizations are an
important funding source for public goods.
Table : Voluntary contributions
Canada
Netherlands
U.K.
U.S.
Percent who give
64%
78%
72%
65%
Share of GDP
0.72%
0.34%
0.73%
1.44%
Motivation
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Social importance of voluntary giving reflected in government
policy that encourages giving through matches, tax
deductions, credits.
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Despite these incentives, there are powerful self-interested
free-riding tendencies that left unchecked would reduce
voluntary giving to very low levels (Andreoni 1988).
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Warm glow — utility derived from the act of giving to a
charity — counters free-riding (Andreoni 1989).
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Warm glow must be socialized, starting in childhood.
Motivation
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But how?
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What socialization techniques are effective in raising
charitable children?
Introduction
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Extensive experimental literature in developmental psychology
has established the existence of causal effects of role-modeling
and verbal socialization on children’s giving in the lab
(Eisenberg, Fabes, and Spinrad 2006).
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consensus, but . . .
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Eisenberg and Mussen (1989): “It cannot be assumed that
procedures that prove to be effective in laboratory studies
(such as modeling) will necessarily have a significant and
lasting impact on behavior when introduced in a natural
setting such as the home . . . Thus, it is important to test in
natural settings the effectiveness of those procedures that
promote prosocial behavior in the laboratory.”
Introduction
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Nearly 25 years later, there is still little empirical evidence
about the magnitude of causal effects of role-modeling and
verbal socialization from nationally-representative data
collected from children’s home settings.
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Cross-sectional regressions find that both parental
role-modeling and verbal socialization have large associations
with children’s giving money to charities (Brown, Srivastava,
and Taylor 2012; Ottoni-Wilhelm, Estell, and Perdue 2011).
Parental role-modeling and verbal socialization actions are
endogenous, potentially correlated with child-specific
unobserved heterogeneity:
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Prosocial endowments – time-constant
Prosocial environments/values – time-varying
Parents may adjust role-modeling and verbal socialization
to changes in a child’s prosociality
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A parent observes her child exogenously becoming more
prosocial (increasing prosocial values):
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May think that, because the child is becoming more prosocial
on his own, she can reduce the parenting effort devoted to
socializing the child to give to charity...
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... and increase efforts devoted to socializing him to achieve
other behavioral goals,
... or increase the effort devoted to socializing his sibling to
give to charity.
Alternatively, the parent may realize that now is the time, and
reinforce the teachable moment by talking more to her child
about giving to charity...
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... and showing the child her example of giving to charity.
This Paper
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Estimates of the causal effects of verbal socialization and
role-modeling that use nationally-representative data from
children in their home settings.
Individual and sibling fixed effects specifications and two
additional specifications seldom considered:
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Across-time sibling fixed effects
Difference over time between siblings
This Paper
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Maps the identifying assumptions necessary to infer causal
effects to assumptions about parental:
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Compensation versus reinforcement
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Intra-household allocation (Becker and Tomes 1976)
Substitution versus complementarity
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Intra-household allocation (Becker and Tomes 1976, 1979)
Cultural transmission and socialization (Bisin and Verdier
2011)
This Paper - substantive results
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The pattern of our estimates indicates that parents socialize a
child differently depending upon changes in his/her sibling’s
prosocial values.
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Our estimates imply that talking to children about giving
raises the probability they give by at least 0.13.
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Our estimates indicate no evidence that parents’ role-model of
giving has a causal effect on children’s giving.
Different estimated effects among demographic sub-groups.
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Parental role-modeling affects giving by ... boys or girls (you
guess).
Three audiences
1. Charitable giving, voluntary contributions – substantive results
about socialization of warm glow.
2. Experimentalists – external validity of laboratory results.
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Carpenter, Connolly, and Meyer (2008)
Henrich, Heine, and Norenzayan (2010)
3. Children’s outcomes – investment in human capital (e.g.,
education, health).
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Econometric strategy – indiv. FE, sibling FE + using the
intra-household allocation and cultural transmission literatures
to establish the identification framework.
Generally applicable to estimate causal effects of parental
socialization/investment actions on children’s outcomes.
Roadmap
1. Econometric Model and Identification Framework
2. Data: Panel Study of Income Dynamics (PSID) + Center on
Philanthropy Panel Study (COPPS), Child Development
Supplement (CDS)
3. Empirical Results
4. Discussions
5. Conclusion
Econometric Model 1 - the child
Consider a model of charitable giving Yijt for child i in family j at
time t:
Yijt = βXijt + µj + αij + θijt + vijt
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Xijt : parent’s socialization action
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µj : family-specific time-constant prosocial endowment
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αij : child-specific prosocial endowment
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θijt : time-varying idiosyncratic prosocial values
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vijt : random shocks to the child’s giving
For a two-child family, sibling k’s outcome equation:
Ykjt = βXkjt + µj + αkj + θkjt + vkjt
Econometric Model 2 - the parent
Parental socialization decisions:
Xijt = γ1 αij + γ2 αkj + δµj + π1 θijt + π2 θkjt + uijt
Xkjt = γ1 αkj + γ2 αij + δµj + π1 θkjt + π2 θijt + ukjt
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uijt and ukjt : random socialization shocks unrelated to
children’s endowments and idiosyncratic prosocial values
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δ: effect of the family-specific time-constant prosocial
endowment on parent’s socialization of both children
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γ1 , γ2 : parent’s socialization responses to the child-specific
and his sibling’s specific time-constant prosocial endowments
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π1 , π2 : parent’s socialization responses to the child’s and his
sibling’s idiosyncratic time-varying prosocial values
Child and Sibling Fixed Effects
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The child fixed effects estimator
plim b T = β +
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π1 σθ2
(π12 + π22 )σθ2 + σu2
The sibling fixed effects estimator
plim b J = β +
(γ1 − γ2 )σα2 + (π1 − π2 )σθ2
(γ1 − γ2 )2 σα2 + (π1 − π2 )2 σθ2 + σu2
Two additional sibling estimators, seldom considered
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Difference over time between siblings
plim b JT = β +
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(π1 − π2 )σθ2
(π1 − π2 )2 σθ2 + σu2
Across-time sibling fixed effects estimator
plim b JDT = β +
(γ1 − γ2 )σα2 + π1 σθ2
(γ1 − γ2 )2 σα2 + (π12 + π22 )σθ2 + σu2
Identification Framework
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T
JT
Our estimates indicate γ\
1 − γ2 = 0, focus on b and b .
plim b T = β +
plim b JDT = β +
plim b J = β +
(γ1 − γ2 )σα2 + π1 σθ2
(γ1 − γ2 )2 σα2 + (π12 + π22 )σθ2 + σu2
(γ1 − γ2 )σα2 + (π1 − π2 )σθ2
(γ1 − γ2 )2 σα2 + (π1 − π2 )2 σθ2 + σu2
plim b JT = β +
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π1 σθ2
(π12 + π22 )σθ2 + σu2
(π1 − π2 )σθ2
(π1 − π2 )2 σθ2 + σu2
Therefore we focus on b T and b JT when developing the
identification framework.
Identification Framework - focus on b T and b JT
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We map each (π1 , π2 ) pair to qualitative assumptions about
parental:
1. Compensation-versus-reinforcement in response to changes in
the difference between children’s prosocial values
2. Substitution-versus-complementarity in response to changes in
the sum of children’s prosocial values
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We can then map these assumptions to the directions and
relative magnitudes of the biases in the b T and b JT estimators
Identification Framework (1a) - Intra-household allocation
p2
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p1 - p2 < 0
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Quadrant 3
-2
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Identification Framework (1b) - Cultural transmission
p2
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Identification Framework (1c) - Cultural transmission +
Intra-household allocation
p2
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Identification Framework (1d) - Cultural transmission +
Intra-household allocation
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The π2 = π1 and π2 = −π1 lines partition the π1 , π2 plane
into four triangles
1.
2.
3.
4.
Compensation and SUBSTITUTION (the west triangle)
Reinforcement and SUBSTITUTION (the south triangle)
Reinforcement and COMPLEMENTARITY (the east triangle)
Compensation and COMPLEMENTARITY (the north triangle)
Identification Framework (2a) - Directions of bias in b T
and b JT
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The π1 , π2 plane can be partitioned into regions characterized
by different directions of bias in b T and b JT .
Identification Framework (2b) - Directions of bias in b T
and b JT
p2
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+
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0
--
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+
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b
Quadrant 3
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-1
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Identification Framework (3a) - Magnitudes of bias in b T
and b JT
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The π1 , π2 plane can be partitioned into regions in which the
magnitude of the bias in either b T or b JT is smaller.
Identification Framework (3b) - Magnitudes of bias in b T
and b JT
p2
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-2
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EN TE
EM ITU
T
BS
SU
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2
PL
M
R = su / sq
Quadrant 2
-1
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1
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Identification Framework - Summary
p2
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Quadrant 3
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1
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Data sources: PSID, COPPS, and CDS
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PSID: Nationally representative longitudinal sample of over
22,000 individuals living in 8,000 families in the United States,
1968ff.
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COPPS: Generosity module in the PSID, 2001ff.
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CDS: Started in 1997, children from PSID-responding family
units. From each family unit up to two children aged 0-12
were selected. CDS–2 in 2002 and CDS–3 in 2007.
Data: key variables
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CDS–2 and CDS–3 children ages 8 and older were asked
“Did you give some of your money last year–if only a few
pennies–to a church, synagogue, or another charity that helps
people who are not part of your family?”
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The child’s primary care giver, usually the child’s mother, was
asked
“Do you ever talk to (CHILD) about giving some of (his/her)
money–if only a few pennies–to a church, synagogue, or
another charity?”
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Information on giving to religious congregations and charitable
organizations from the PSID’s COPPS module 2001-2007
waves form our role-modeling variables.
Data: samples
1. Child fixed effects sample: 936 children who were old enough
in CDS–2 to have been asked the giving question, and young
enough in CDS–3 to have not aged out.
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144 pairs in which both siblings are present in CDS–2 and
CDS–3. We use this sample in our difference over time
between siblings model.
2. Sibling fixed effects sample: 576 sibling pairs (1,152 children)
in which both children were old enough in CDS–2 to have
been asked the giving question.
3. Across-time sibling fixed effects sample: 521 sibling pairs
(1,042 children) in which older sibling in CDS–2 and a
younger sibling in CDS–3.
Descriptive Statistics 1a - Child giving over time
0
.15
Fraction
.3
.45
.6
Giving, same child, over time
0 -> 0
1 -> 0
0 -> 1
1 -> 1
Descriptive Statistics 1b - Parent talking over time
0
.15
Fraction
.3
.45
.6
Parent talking, same child, over time
0 -> 0
1 -> 0
0 -> 1
1 -> 1
Descriptive Statistics 1c - Parent role-modeling over time
0
.15
Fraction
.3
.45
.6
Parent role-model, same child, over time
0 -> 0
1 -> 0
0 -> 1
1 -> 1
Descriptive Statistics 2a - Giving: younger sib, older sib
0
.15
Fraction
.3
.45
.6
Giving, sibling pair: younger (first), older (second)
0,0
1,0
0,1
1,1
Descriptive Statistics 2b - Parent talking: younger, older
0
.15
Fraction
.3
.45
.6
Parent talking, sibling pair: younger (first), older (second)
0,0
1,0
0,1
1,1
OLS vs. Child Fixed Effects Estimates
Table 3. Cross-sectional and Within-child Estimates of Effects of
Verbal Socialization and Role-modeling
OLS
Parent talks about giving
Role-modeling: parent gives
Observations
0.135***
(0.025)
0.062***
(0.022)
1,858
Dependent Variable: Child's Giving
Child FE
0.119***
0.131***
0.128***
(0.026)
(0.036)
(0.037)
0.064**
-0.005
-0.004
(0.025)
(0.037)
(0.038)
1,839
1,806
1,806
Source: Authors' calculations from PSID and CDS samples.
Notes: 1. Different numbers of observations for columns are due to missing values on some of the
independent variables, results do not change if all the regressions are based on the smallest sample.
2. Robust standard errors clusted at individual level are in parentheses.
3. *** p<0.01, ** p<0.05, * p<0.1
4. All regressions include a year dummy.
Sibling Fixed Effects Estimates
Table 4. Different Types of Within-sibling Estimates of the Effects of
Verbal Socialization and Role-modeling
Sibling FE
Parent talks about giving
Dependent Variable: Child's Giving
Difference Over Time
Across-time Sibling FE
Between Siblings
0.027
(0.074)
0.007
(0.070)
-0.067
(0.149)
-0.120
(0.147)
0.142***
(0.048)
-0.068
(0.056)
0.125**
(0.050)
-0.061
(0.055)
1,152
1,152
288
288
1,042
1,042
Role-modeling: parent gives
Observations
Source: Authors' calculations from PSID and CDS samples.
Notes: 1. Robust standard errors are in parentheses.
2. *** p<0.01, ** p<0.05, * p<0.1
Discussion - no identifying assumptions required
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Parents neither compensate nor reinforce differences between
their children’s prosocial endowments, that is γ1 = γ2 .
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Parents do socialize child i differently depending upon
time-varying changes in child k’s prosocial values, that is
π2 6= 0.
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ˆ and bˆJ ≈ bˆJT
bˆT ≈ b JDT
bˆT 6= bˆJT
Some π1 , π2 combinations can be ruled out (e.g., substitution
combined with reinforcement)
Identification Framework (again)
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T
JT
Our estimates indicate γ\
1 − γ2 = 0, focus on b and b .
plim b T = β +
plim b JDT = β +
plim b J = β +
(γ1 − γ2 )σα2 + π1 σθ2
(γ1 − γ2 )2 σα2 + (π12 + π22 )σθ2 + σu2
(γ1 − γ2 )σα2 + (π1 − π2 )σθ2
(γ1 − γ2 )2 σα2 + (π1 − π2 )2 σθ2 + σu2
plim b JT = β +
I
π1 σθ2
(π12 + π22 )σθ2 + σu2
(π1 − π2 )σθ2
(π1 − π2 )2 σθ2 + σu2
Therefore we focus on b T and b JT when developing the
identification framework.
Discussion - π1 , π2 combinations ruled out
p2
Quadrant 1
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1
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JT
JT
T
0
p1
1/2
1/2
-R
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JT
C
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PL ST
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Quadrant 3
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Discussion - Identifying assumption of cultural substitution
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Child-fixed estimate (.13) is a lower bound to the causal effect
of verbal socialization.
Two supporting reasons for cultural substitution
1. If complement then
(a) Intra-household literature indicates that some other use of
parental time must be a non-normal good, or
(b) Some other theory of parental socialization must be used
(e.g., bounded rationality)
2. If complement then
(a) Cultural transmission literature predicts that giving should be
homogeneous in the population - everyone should be giving to
charity, but
(b) The evidence is that giving is heterogeneous in the population
(between 64% - 78% give)
Discussion - Cultural substitution (continued)
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An additional check on the identifying assumption of
substitution is that substitution + the pattern of estimates we
get rules out parental reinforcement of within-sibling changes
in their childrens prosocial values. It would then follow that
parents must be must be compensating these changes.
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Compensation implies parents adjust their socialization actions
in response to the specific needs of their children. An
influential view in child development is that best parenting
practices do exactly that.
Cultural substitution is sufficient, but not necessary, for the
.13 to be a lower bound.
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Necessary condition is weak complementarity.
To argue for a zero causal effect requires an identifying
assumption of strong complementarity ...
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plus very weak (zero) parental compensation of within-sibling
changes in prosocial values,
or reinforcement.
Discussion - summary figure (if needed)
p2
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1
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EN TE
TU
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BS
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Quadrant 4
JT
JT
T
0
p1
1/2
1/2
-R
R
T
JT
C
C
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nf
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or
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-1
JT
T
EN TE
EM ITU
PL ST
B
SU
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-2
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Quadrant 3
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Quadrant 2
-1
0
1
2
Discussion - Role-modeling
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The child fixed effects estimates taken at face value imply a
zero causal effect of role-modeling.
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Demographic differences
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Large role-modeling effect among non-African-American girls
(.14).
Large effects of parents talking about giving among
African-American girls and non-African-American boys (.18,
.22).
Conclusions
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Provides estimates of the causal effects of verbal socialization
and role-modeling on children’s charitable giving based on
nationally-representative data from children in their home
settings.
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We develop a framework useful for identifying causal effects of
parental socialization/investment actions on children’s
outcomes in the presence of time-varying unobserved
heterogeneity.
Under the identifying assumption we think is most
reasonable—that parents treat the socialization actions of
others as cultural substitutes—our estimates imply that
talking to children about giving raises the probability they give
by at least 0.13.
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Parents whose goal is to socialize warm glow should continue,
not curtail, conversations about giving as their children age
through adolescence.
Conclusions
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Surprisingly, in light of the developmental psychology
experiments, our estimates based on the full sample of
children indicate no evidence that parents’ role-model of
giving has a causal effect on children’s giving.
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Laboratory results on role-modeling were not externally
validated, except for non-Afr. Amer. girls.
Translational research is needed to learn how role-modeling,
known to be effective in the laboratory, can be used effectively
in the home.
The effects of verbal socialization and role-modeling vary
across demographic groups.
Thank you!
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Centre for Competitive Advantage in the Global Economy
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Centre for Market and Public Organisation
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Economic and Social Research Council
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Department of Economics, University of Warwick
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Notre Dame Science of Generosity Project
Foundations that fund the collection of generosity data in the
PSID
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Atlantic, Gates, Fidelity Charitable, John Templeton, Mott,
Corporation for National and Community Service, and others
like you.
Child Fixed Effects Estimates: Demographic Sub-groups
Table 6. Within-child Estimates of Effects of Verbal Socialization and Role-modeling
for Different Demographic Groups
Dependent Variable: Child's Giving
African-Amer. non-African-Amer. African-Amer. non-African-Amer.
girls
girls
boys
boys
Parent talks about giving
0.184**
0.071
0.081
0.216***
(0.087)
(0.066)
(0.080)
(0.067)
Role-modeling: parent gives
-0.135
0.143*
0.065
-0.073
(0.087)
(0.074)
(0.071)
(0.069)
Observations
376
478
420
532
Source: Authors' calculations from PSID and CDS samples.
Notes: 1. Robust standard errors clusted at individual level are in parentheses.
2. *** p<0.01, ** p<0.05, * p<0.1
3. All regressions include a year dummy.