Venue: The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, NC 27708-0120
Presentation
Child Development as Early Human Capital Formation: Parents Investment and Child Attention Regulation
Background: There is an increasing recognition of the importance of early child development in long-term economic and health outcomes. Economists have much to bring to this discussion, including the concept of parental investment in human capital. One of the most important forms of early human capital is attentional capacity, which has been linked to successful school performance and to resistance to risky behaviors in adolescence. While the importance of parental investment to developing good reading and math skills has long been recognized, there has been to date very little attention to the role of parental investment in promoting good behavioral development.
Objectives: To define parental investment in early human capital in ways that are consistent with both psychology and economics, and to test whether parental investment (in the forms of cognitive stimulation, reading, language input, and emotional support) in children before age 3 is associated with the subsequent attentional capacity of the child. Methods: The 1997 and 2002 waves of the Child Development Supplement of the Panel Study of Income Dynamics (PSID) are used. The PSID is a nationally representative survey, with extensive data on economic attributes and outcomes on households over several generations. The Child Development Supplement contains extensive information about the child's home environment, time use, and behavior and development. Complete, detailed data on parental investment, children's attentional capacity, and relevant potential confounders are available for 390 children ages 2-10 in 1997 and followed up in 2002. In a first analysis, attentional capacity at ages 5-8 is regressed on parental investment when the child is 0-3, measured by existing psychometrically validated scales of cognitive stimulation and emotional control, controlling for family and child demographics, parental income, employment status, and education, and child's television viewing. A second analysis uses measures of parent-child interaction, derived from time-diary data, as the proxy for parental investment. Subsequent analyses use instrumental variables to identify the effects of exogenous variation in parental investment.
Results: Both measures of parental investment?psychometric scales and time-use derived estimates?are statistically significant and economically meaningful predictors of subsequent child attentional capacity, controlling for a host of parent and child attributes. A one-standard deviation increased in the cognitive stimulation scale is associated with a risk of subsequent attentional problems that is 15% lower. For the emotional support scale the risk is 75% lower. Children whose parents spend at least 25 minutes per day engaged in focused interaction with them (by playing with them, talking to them, reading, or storytelling) have less than 10% the risk of subsequent problems of attention regulation, ceteris paribus. Instrumental variables analyses are underway, and will be completed by June, 2008.
Conclusions: Parental investment in early human capital has a significant, important, and long-lasting effect on behavioral and developmental outcomes for children. Economists have much to add to the discussions of programs to promote healthy early child development.