Raising Capital
Investing in Infants: The Lasting Effects of Cash Transfers to New Families
Andrew Barr, Jonathan Eggleston & Alexander Smith
Quarterly Journal of Economics, forthcoming
Abstract:
We provide new evidence that cash transfers following the birth of a first child can have large and long-lasting effects on that child's outcomes. We take advantage of the January 1 birthdate cutoff for U.S. child-related tax benefits, which results in families of otherwise similar children receiving substantially different refunds during the first year of life. For the average low-income single-child family in our sample this difference amounts to roughly $1,300, or 10 percent of income. Using the universe of administrative federal tax data in selected years, we show that this transfer in infancy increases young adult earnings by at least 1 to 2 percent, with larger effects for males. These effects show up at earlier ages in terms of improved math and reading test scores and a higher likelihood of high school graduation. The observed effects on shorter-run parental outcomes suggest that additional liquidity during the critical window following the birth of a first child leads to persistent increases in family income that likely contribute to the downstream effects on children's outcomes. The longer-term effects on child earnings alone are large enough that the transfer pays for itself through subsequent increases in federal income tax revenue.
Recreational marijuana legalization and admission to the foster-care system
John Gardner & Bright Osei
Economic Inquiry, forthcoming
Abstract:
We estimate the effects of legalized recreational marijuana on entry into the foster-care system. Exploiting state-level variation in legalization and its timing, we estimate that legalization decreases foster-care placements by at least 10%, with larger effects in years after legalization, and for admissions for reasons of parental drug and alcohol abuse, physical abuse, neglect, and parental incarceration. Our findings imply that legalization may have important consequences for child welfare, and that substitution toward marijuana from other substances can be an important part of how legalization affects admissions.
Mother's Time Allocation, Childcare, and Child Cognitive Development
Ylenia Brilli
Journal of Human Capital, forthcoming
Abstract:
This paper analyzes the effects of maternal and nonparental time on a child's cognitive development. Using data from the Panel Study of Income Dynamics, we estimate a model that allows the mother's time productivity to depend on her education level and that distinguishes between formal and informal care. The results show that childcare time of high-educated mothers is more productive than that of low-educated mothers and that of nonparental care. The simulation of policies subsidizing mothers' wages or regulating the nonparental care market indicates that children with low-educated mothers benefit more from replacing maternal time with nonparental time.
Personality traits, mental abilities and other individual differences: Monozygotic female twins raised apart in South Korea and the United States
Nancy Segal & Yoon-Mi Hur
Personality and Individual Differences, forthcoming
Abstract:
Twins reared apart are rare, especially twins raised in different countries and cultures. This report documents the behavioral, physical, and medical similarities and differences of monozygotic female cotwins, raised separately by an adoptive family in the United States and the biological family in South Korea. Similarities were evident in personality, self-esteem, mental health, job satisfaction and medical life history, consistent with genetic influence found by the Minnesota Study of Twins Reared Apart and related studies. An overall twin correlation across thirty-eight measures was r = 0.95, p < .001. In contrast with previous research, the twins' general intelligence and non-verbal reasoning scores showed some marked differences. Adding these cases to the psychological literature enhances understanding of genetic, cultural, and environmental influences on human development.
Childcare over the Business Cycle
Jessica Brown & Chris Herbst
Journal of Labor Economics, April 2022, Pages S429-S468
Abstract:
We estimate the impact of macroeconomic conditions on the childcare market. We find that the industry is substantially more exposed to the business cycle than other low-wage industries and responds more strongly to negative shocks than positive ones. Indeed, childcare employment requires more time to recover than the rest of the economy. Although the reduction in supply may pose difficulties for parents, we find evidence that center quality is countercyclical. When unemployment rates are higher, childcare workers have on average higher levels of education and experience, turnover rates are lower, and consumer reviews on Yelp are higher.