Parental Investments and Intra-household Inequality in Child Human Capital: Evidence from a Survey Experiment

Abstract

Abstract Intra-household inequality explains 40% of child human capital variation in the developing world. I study how parents’ investment contributes to this inequality. To mitigate the identification problem posed by observational data, I design a survey experiment with parents in India that allows me to identify beliefs about the human capital production function, preferences for inequality in outcomes and the role of resources. I find that investments are driven by efficiency considerations: as parents perceive investment and ability as complements, they invest more in higher-achieving children and more so when constrained. Simulations indicate that interventions have intra-household distributional impacts through parental responses.