What Drives Inequality in Parental Investment in Children?
Abstract: Parental investment gaps in both time and money account for much of the differences in children’s educational achievement across socio-economic groups. What drives these gaps in investments? I develop a dynamic model of parental investment and child devel- opment that incorporates education-based heterogeneity in four possible mechanisms: preference for children’s human capital, return on parental investment, family structure, and family income, with the first three mechanisms being novel. I estimate the model with Simulated Method of Moments based on a large U.S. panel dataset (ECLS-K), which was merged with the American Time Use Survey and the Consumer Expendi- ture Survey using a new econometric framework to yield more accurate measures of investment and therefore estimation. The results show that more-educated parents value children’s human capital more and also receive a higher return on investment in terms of both time and money. However, the main reason why less-educated parents invest less in their children is that their investments are less effective. Consistent with this finding, my policy analysis suggests that interventions aimed at improving parent- ing skills are four (fifteen) times as effective in improving children’s cognitive skills as restricted (unrestricted) cash transfers at a similar cost.
Taking PISA Seriously: How Accurate are Low Stakes Exams?
--with Kala Krishna and Pelin Akyol, NBER Working Paper NO. 24930 (submitted)
Abstract: PISA is seen as the gold standard for evaluating educational outcomes worldwide. Yet, being a low-stakes exam, students may not take it seriously resulting in downward biased scores and inaccurate rankings. This paper provides a method to identify and account for non-serious behavior in low-stakes exams by leveraging information in computer- based assessments in PISA 2015. We compare the score/rankings with no corrections to those generated using the PISA approach as well as our method which fully corrects for the bias. We show that the total bias is large and that the PISA approach corrects for only about half of it.
Media coverage: EDUCATIONDIVE, The Washington Post
Reducing Exam Madness: Supply-Side Policies
Abstract: Admission into universities has large rents due to increasing returns to skills and subsidies to higher education. These are partially dissipated ex-ante via greater effort and retaking. While privately beneficial, this is socially wasteful. Are there simple lessons for policy in such environments? It is shown that policy depends on the details of the environment. With relatively homogeneous schools, expansion and quality improvement tend to be universally welfare improving. However, when schools are very differentially valued, raising the quality of good schools raises welfare for high ability agents at the cost of lower ability ones.
The Broken American Dream: The Role of Family in Increasing Education Inequality
This project seeks answers to the following questions: How have the educational achievement gap across socio-economic groups changed in the past forty years in the U.S.? What factors drive the change, and through which channels? To answer these questions, I put together nine national representative education surveys from 1970s to 2010s and document an increasing correlation between children's cognitive skills and family income. Consistent with this pattern, we also observe increasing socio-economic divergence in family structure and parental investment in terms of both time and money, which I document with ATUS, CES and CPS datasets. By developing and estimating a structural model, I aim to understand how changes in some factors, such as the increasing skill premium, widen the socio-economic gap in parental investment and how the rising investment gap contributes to the increasing education inequality.
Catch Up or Drop Out: The Role of Colleges As an Equalizer
This project aims to understand whether colleges weaken or strengthen the intergenerational mobility. Chetty et.al. (2017) documents that children from low- and high-income families have similar earnings outcomes conditional on the college they attend. However, I find that this is not because they have similar cognitive skills upon admission. Using CIRP Freshman Survey, which surveys the whole population of freshmen in hundreds of universities every year, I document an enormous gap in SAT/ACT scores between students from poor and rich families conditional on attending the same college. These two empirical facts together suggest that either SAT/ACT scores are imperfect measures of students' ability or students from low-income families do catch up during the college. If the latter is the case, how do these poor students who have lower scores upon admission manage to catch up with their richer peers during the college, despite all the additional hardships they may face? Intrigued by this question, I use two datasets - Baccalaureate and Beyond (B&B) and Beginning Postsecondary Students Longitudinal Study (BPS)- to track students from entering the college all the way to their labor market, and compare students across socio-economic groups in terms of their initial cognitive skills upon admission, experiences and academic achievement during the college as well as labor market outcomes. Such detailed characterization contributes to the literature with a more comprehensive understanding of how colleges shape intergenerational mobility as well as the mechanisms behind it. As a result, this study can not only help us to better understand the consequences of the controversial affirmative action in college admissions, but also offer important policy implications to promote intergenerational mobility and education equality.