FROM PARENT TO
CHILD
Association Between Parental Resources and
Child Development in Peru
Milo Vandemoortele
DSA Conference
November, 2013
Overarching Research Question
How and to what extent are parental
resources associated with child
development?
A case study of Peru
Why do research on this topic?
• A “conservative estimate that more than 200 million
children under 5 years fail to reach their potential in
cognitive development because of poverty…” and its
attendant problems.1
• Long term consequences2
• Poor children are more likely to remain poor
• Limited research on the topic
1 Grantham-McGregor et al., 2007:60; 2 Walker et al., 2011
Research Questions
How and to what extent are parental resources associated
with child development? Particularly focusing on:
i. Parental resources at birth and each subsequent stages of
life
ii. Changes in parental resources
iii. Differential effect of parental wealth versus parental
expenditure
iv. Shape of the association – is it linear?
v. Does the effect of parental resources differ for poorer
children versus wealthier children
Analytical Framework
Source: Adapted from Haveman and Wolfe (1995), Grantham-McGregor et al. (2007)
Data: Young Lives
•
Four countries: Ethiopia, Andhra Pradesh (India), Peru
and Vietnam
Total sample of 12,000 children followed over a period
of 15 years
Sample size used here, younger cohort in Peru ~2000
children born in 2001/02
Three survey rounds (birth, 5/6 yrs and 7/8 yrs)
Extremely low attrition rates (7% in Peru)
•
Limitations
•
•
•
•
Analytic Approach
• Challenge: Omitted variable bias and endogeniety leads
to biased estimates
• Several approaches available to address this
• Latent Trait Modeling to recalculate the wealth index
Models
1) OLS with Community Fixed Effects
2) Spline with Community Fixed Effects
3) Child Level Fixed Effects (First-Differences)
Control Variables
• Child specific:
• gender
• race/ethnicity
• birth weight
• chronic health problems
• stunting
• age
• subjective socio-economic status (at age 7/8 yrs)
• Household level:
• siblings
• caregivers level of education
• proxies for household non-cognitive environment:
• maternal depression
• caregiver’s educational aspirations of child
• negative child rearing experience
• network/social capital
• main language spoken at home
Model 1: OLS with Community Fixed Effects
2
𝐶
𝑆𝑖𝑗,𝑡
= 𝑎0 +
2
𝛽𝑛 log(𝑌)𝑖𝑗,𝑡−𝑛 +
𝑛=0
𝐾
𝑘
𝜆𝑘 𝑥𝑖𝑗𝑡
+ 𝛼𝑗 +
𝜏𝑛 W𝑖𝑗,𝑡−𝑛 +
𝑛=0
𝐿
𝑘=1
𝑙
1
𝛾𝑙 𝑦𝑖𝑗𝑡
+ 𝜇𝑖𝑗,𝑡
𝑙=1
Where:
𝐶
• 𝑆𝑖𝑗,𝑡
is the cognitive outcome observed in Round 𝑡 for child 𝑖 in community
𝑗
• log(𝑌)𝑖𝑗,𝑡−𝑛 is expenditure (logged) in Round 𝑡 − 𝑛 (𝑛 = 0,2)
• W𝑖𝑗,𝑡−𝑛 is household wealth
𝑘
• 𝑥𝑖𝑗𝑡
are observed child-level factors, where there are 𝐾 number of variables
(𝑘 = 1, 𝐾)
• 𝛼𝑗 represents the community fixed effects.
𝑙
• 𝑦𝑖𝑗𝑡
are the unobserved exogenous factors affecting child development,
where L is the number of variables (𝑙 = 1, 𝐿).
1
• 𝜇𝑖𝑗𝑡
captures measurement error
Model 2: Spline with Community FE
• Are there non-linear effects?
• A prototypical model is represented as follows:
2
𝐶
𝑆𝑖𝑗𝑡
= 𝑎0 +
2
𝑠(log(𝑌)𝑖𝑗,𝑡−𝑛 ) +
𝑛=0
𝐾
𝑘
𝜆𝑘 𝑥𝑖𝑗𝑡
+ 𝛼𝑗 +
𝑠(W𝑖𝑗,𝑡−𝑛 ) +
𝑛=0
𝐿
𝑘=1
𝑙
1
𝛾𝑙 𝑦𝑖𝑗𝑡
+ 𝜇𝑖𝑗𝑡
𝑙=1
• The only difference between Equation 2 and Equation 1 is the
spline function around the household resources variables
𝑠(log(𝑌)𝑖𝑗,𝑡−𝑛 ) and 𝑠(W𝑖𝑗,𝑡−𝑛 )
Model 3: First-difference model
• Controls for differences between households and communities
• Allows to examine the effect of changes in parental resources on child
development
𝐶
𝑆𝑖,𝑡+1
− 𝑆𝑖𝑡𝐶
2
= 𝑎0 +
2
𝛽𝑛 log 𝑌𝑖,𝑡+1−𝑛
𝑛=0
𝜏𝑛 W𝑖,𝑡+1−𝑛 − W𝑖,𝑡−𝑛 + 𝛽3 log 𝑌𝑖,0
𝑛=0
2
+ 𝜏3 𝑊𝑖,0 + 𝛽4
2
− log 𝑌𝑖,𝑡−𝑛 ) +
log 𝑌𝑖,0 ∗
log 𝑌𝑖,𝑡+1−𝑛
− log 𝑌𝑖,𝑡−𝑛
𝑛=0
1
1
𝑊𝑖,0 ∗ W𝑖,𝑡+1−𝑛 − W𝑖,𝑡−𝑛 + 𝛽5 𝑇𝑖 + (𝜇𝑖,𝑡+1
−𝜇𝑖,𝑡
)
+ 𝜏4
𝑛=0
𝐶
𝐶
• 𝑆𝑖𝑡
− 𝑆𝑖,𝑡−1
: changes in the developmental outcome between age 5/6 yrs and 7/8
yrs
Results: OLS with Community FE (1)
Vocabulary
5/6 yrs
Vocabulary
7/8 yrs
Math
5/6 yrs
Math
7/8 yrs
Reading
7/8 yrs
VARIABLES
(PPVT)
(PPVT)
(CDA-Q)
(Math)
(EGRA)
Wealth at birth
2.49***
(0.67)
-0.56
(0.32)
1.08
(0.57)
-0.51
(0.27)
0.14
(0.10)
0.01
(0.05)
0.50*
(0.22)
-0.13
(0.11)
0.31*
(0.15)
-0.03
(0.07)
Wealth age 5/6yrs
4.55***
(0.64)
2.00**
(0.63)
0.31**
(0.10)
0.53*
(0.25)
0.37*
(0.17)
Log consumption age 5/6yrs
1.87**
(0.62)
-0.32
(0.54)
2.87***
(0.61)
0.26**
(0.09)
0.22
(0.21)
1.01***
(0.24)
0.08
(0.14)
0.44**
(0.16)
0.42
(0.22)
0.28
(0.15)
1,807
82
1,668
82
Log consumption at birth
Wealth age 7/8yrs
Log consumption age 7/8yrs
Observations
Number of Communities
1.59**
(0.57)
1,806
81
1,765
82
1,849
82
Standard errors in parentheses
*** p<0.001, ** p<0.01, * p<0.05
Consumption appears to have a positive and contemporaneous effect.
Wealth too, but also a lagged effect.
Results: OLS with Community FE (2)
Vocabulary
5/6 yrs
Vocabulary
7/8 yrs
Math
5/6 yrs
Math
7/8 yrs
Reading
7/8 yrs
VARIABLES
(PPVT)
(PPVT)
(CDA-Q)
(Math)
(EGRA)
Wealth at birth
2.49***
(0.67)
1.08
(0.57)
0.14
(0.10)
0.50*
(0.22)
0.31*
(0.15)
Log consumption at birth
-0.56
(0.32)
-0.51
(0.27)
0.01
(0.05)
-0.13
(0.11)
-0.03
(0.07)
Wealth age 5/6yrs
4.55***
(0.64)
1.87**
(0.62)
2.00**
(0.63)
-0.32
(0.54)
0.31**
(0.10)
0.26**
(0.09)
0.53*
(0.25)
0.22
(0.21)
0.37*
(0.17)
0.08
(0.14)
Log consumption age 5/6yrs
Wealth age 7/8yrs
2.87***
(0.61)
1.01***
(0.24)
0.44**
(0.16)
Log consumption age 7/8yrs
1.59**
(0.57)
0.42
(0.22)
0.28
(0.15)
1,807
82
1,668
82
Observations
Number of Communities
1,806
81
1,765
82
1,849
82
Standard errors in parentheses
*** p<0.001, ** p<0.01, * p<0.05
Wealth is a better predictor of children’s math and reading skills at
7/8 yrs old than consumption.
Results: Spline with Community FE (1)
• The effect of wealth on vocabulary scores at age 5/6 yrs is non-linear, whereas the
effect of expenditure is linear.
• This is differs with math scores at 5/6 yrs, where the effect of wealth and expenditure
in the same time period are broadly linear.
Results: Spline and Community FE (3)
With maths and reading scores at 7/8 yrs, wealth in the previous
period (5/6 yrs) appears to have a nonlinear effect.
Results: First-Differences (1)
Changes in expenditure between 5/6 and 7/8 years appear to
benefit the poorest children more than the better off children.
Changes in Expenditure (5/6-7/8yrs)
Changes in Expenditure (5/6-7/8yrs)
Average Marginal Effect
20
10
0
Math
-10
-20
0
-10
Vocabulary
10
Change in Score 5/6-7/8 yrs
30
20
Average Marginal Effect
Poorest
ppvt_dif
Poorer
Middle
Wealthier
Expenditure Group at Birth
Wealthiest
Poorest
math_diff
Poorer
Middle
Wealthier
Expenditure Group at Birth
Wealthiest
Summary
• Consumption appears to have a contemporaneous effect,
•
•
•
•
while wealth has both a contemporaneous and lagged
effect on vocabulary test scores.
Data on parental wealth are a better predictor of
children’s maths and reading skills at 7/8 yrs old than
consumption data.
The assumption that wealth is linearly associated with
cognitive development does not hold.
A change in wealth appears to have a lagged effect, while
changes in expenditure an immediate effect on both math
and vocabulary test scores.
This effect appears to benefit poorer children more than
better off children.
Thank you!
m.vandmoortele@lse.ac.uk
Mechanisms
Goods inputs and under-nutrition
• Stunting - negative and significant effect generally
• Long term health problems – no significant effect
• Birth weight – no significant effect
Time inputs / under-stimulation
• Caregiver’s depression – positive with reading at age 7/8 yrs
• Parental aspirations – positive and significance with vocabulary at
age 7/8 yrs
Demographic
• Gender - significant differences in math and vocabulary at age 7/8
yrs, but small
SES
• Subjective SES – small, positive and significant with reading at age
7/8 yrs only
Results: First-Differences (2)
Changes in wealth between birth and 5/6 yrs appears to
benefit poorer children more than wealthier children in both
maths and vocabulary scores.
Changes in Wealth (birth-5/6yrs)
Changes in Wealth (birth-5/6yrs)
Average Marginal Effect
10
20
-20
-10
0
Math
0
-10
Vocabulary
10
Change in Score 5/6-7/8 yrs
20
30
Average Marginal Effect
Poorest
ppvt_dif
Poorer
Middle
Wealth Group at Birth
Wealthier
Wealthiest
Poorest
math_diff
Poorer
Middle
Wealth Group at Birth
Wealthier
Wealthiest