Research

Working Papers

I study how parents perceive the uncertainty of the returns to investment of the child development process and how this uncertainty impacts their actual investment in children. To do so, I develop an elicitation procedure of parental subjective belief distributions about the technology of skill production and their subjective investment costs that is guided by a model of parental investment. I collect data using this procedure and extend existing measurement error correction methods that are necessary in the belief estimation. I show that parents hold downward-biased mean beliefs about returns to investment. Moreover, parents who have higher mean beliefs also hold lower levels of uncertainty about their beliefs. Both mean beliefs and uncertainty correlate with actual investment measures. Finally, I estimate a model of parental investment with reference-dependent preferences and show that even though parents hold low mean beliefs, they have a strong incentive to invest if their child is at risk of having a developmental delay.

The quality of the early environment children experience profoundly influences their human capital development. We investigate retention and compensation of the Early Care and Education workforce by merging datasets from three different government agencies in Texas. We construct a longitudinal panel of individuals born between 1980 and 1989. We study their educational background and their lifecycle labor market dynamics. Turnover in the ECE sector is 37% higher and earnings are 12% to 20% below those in the sectors that employ similar types of workers. We uncover steep educational and racial differences in turnover rates and earnings. We estimate a dynamic discrete choice model of schooling and work decisions for a sample of potential entrants of the ECE sector. We estimate an extensive labor supply elasticity of 2 but a turnover elasticity of -0.5. Our model predicts that entry and retention bonuses would have a small positive impact on recruitment and retention in the ECE industry.

Work in Progress

Policy Briefs