FROM  PARENT TO CHILDAssociation Between Parental Resources and Child Development in Peru

Milo Vandemoortele

DSA ConferenceNovember, 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 QuestionsHow and to what extent are parental resources associated with child development? Particularly focusing on:i. Parental resources at birth and each subsequent

stages of lifeii. Changes in parental resources iii. Differential effect of parental wealth versus

parental expenditureiv. 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

Models1) OLS with Community Fixed Effects2) Spline with Community Fixed Effects3) 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

Where:• is the cognitive outcome observed in Round for child in

community • is expenditure (logged) in Round • is household wealth • are observed child-level factors, where there are number of

variables ( • represents the community fixed effects.• are the unobserved exogenous factors affecting child

development, where L is the number of variables (). • captures measurement error 

Model 2: Spline with Community FE

• Are there non-linear effects? • A prototypical model is represented as follows:

• The only difference between Equation 2 and Equation 1 is the spline function around the household resources variables and

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

• : changes in the developmental outcome between age 5/6 yrs and 7/8 yrs

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*** 1.08 0.14 0.50* 0.31*

(0.67) (0.57) (0.10) (0.22) (0.15)

Log consumption at birth -0.56 -0.51 0.01 -0.13 -0.03

(0.32) (0.27) (0.05) (0.11) (0.07)

Wealth age 5/6yrs 4.55*** 2.00** 0.31** 0.53* 0.37*

(0.64) (0.63) (0.10) (0.25) (0.17)

Log consumption age 5/6yrs 1.87** -0.32 0.26** 0.22 0.08

(0.62) (0.54) (0.09) (0.21) (0.14)

Wealth age 7/8yrs

2.87***

1.01*** 0.44**

(0.61)

(0.24) (0.16)

Log consumption age 7/8yrs

1.59**

0.42 0.28

(0.57)

(0.22) (0.15)

Observations 1,806 1,765 1,849 1,807 1,668

Number of Communities 81 82 82 82 82 Standard errors in parentheses *** p<0.001, ** p<0.01, * p<0.05

Results: OLS with Community FE (1)

Consumption appears to have a positive and contemporaneous effect. Wealth too, but also a lagged effect.

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*** 1.08 0.14 0.50* 0.31*

(0.67) (0.57) (0.10) (0.22) (0.15)

Log consumption at birth -0.56 -0.51 0.01 -0.13 -0.03

(0.32) (0.27) (0.05) (0.11) (0.07)

Wealth age 5/6yrs 4.55*** 2.00** 0.31** 0.53* 0.37*

(0.64) (0.63) (0.10) (0.25) (0.17)

Log consumption age 5/6yrs 1.87** -0.32 0.26** 0.22 0.08

(0.62) (0.54) (0.09) (0.21) (0.14)

Wealth age 7/8yrs

2.87***

1.01*** 0.44**

(0.61)

(0.24) (0.16)

Log consumption age 7/8yrs

1.59**

0.42 0.28

(0.57)

(0.22) (0.15)

Observations 1,806 1,765 1,849 1,807 1,668

Number of Communities 81 82 82 82 82 Standard errors in parentheses *** p<0.001, ** p<0.01, * p<0.05

Results: OLS with Community FE (2)

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)

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5/6

-7/8

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Poorest Poorer Middle Wealthier WealthiestExpenditure Group at Birth

math_diff

Average Marginal EffectChanges in Expenditure (5/6-7/8yrs)

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/6-7

/8 y

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Poorest Poorer Middle Wealthier WealthiestExpenditure Group at Birth

ppvt_dif

Average Marginal EffectChanges in Expenditure (5/6-7/8yrs)

Changes in expenditure between 5/6 and 7/8 years appear to benefit the poorest children more than the better off children.

Voc

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ary

Mat

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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

MechanismsGoods 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.

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-10

010

20C

hang

e in

Sco

re 5

/6-7

/8 y

rs

Poorest Poorer Middle Wealthier WealthiestWealth Group at Birth

ppvt_dif

Average Marginal EffectChanges in Wealth (birth-5/6yrs)

-10

010

2030

Cha

nge

in S

core

5/6

-7/8

yrs

Poorest Poorer Middle Wealthier WealthiestWealth Group at Birth

math_diff

Average Marginal EffectChanges in Wealth (birth-5/6yrs)

Voc

abul

ary

Mat

h