Research

Working Papers

Parental Investment and Peer Effects in Cognitive and Non-Cognitive Skills

This paper investigates whether and how parents adjust their parenting behavior in response to their children's peers. In particular, I analyze whether changes in cognitive and non-cognitive skills of children's friends lead parents to adjust their investment and parenting style such, as monitoring and quality time spend with their children.  Data from Add Health allow me to follow five cohorts of teenagers from grades 7 to 12 with repeated information on individual friendship networks. Combining the empirical strategy of overlapping peer groups and first-differencing, I estimate a simultaneous system of skill and investment equations. First, I show that parental monitoring increases as the level of cognitive skills among peers decreases. Also, mothers compensate for decreases in cognitive skills of their child's peers by increasing verbal investment, while fathers reinforce higher non-cognitive skills of their child's peers with joint activities. Second, I document gender differences in monitoring, where cognitive skills of sons' peers are compensated but non-cognitive skills of daughters' peers are reinforced. Overall, effects in time investment are driven by parents with high educational expectations of their child, and parents that have no close relationship with peer-parents. Third, parental response to peers is not limited to peer skills, the composition of peers as measured by their characteristics also leads to an adjustment in the parenting behavior.

Socioemotional Development during Adolescence: Evidence from a Large Macro Shock

joint with Ghazala Azmat and Katja Kaufmann 

We exploit a large quasi-exogenous shock to study the development of socioemotional skills during adolescence and the consequences for long-term behavior and labor market outlook. Using novel, longitudinal, microdata on cohorts of East German adolescents before and after a large macro shock (the German Reunification), we causally estimate the impact on socioemotional skills, finding substantial negative effects in the short run. These effects are substantially larger among those affected by the shock in their early adolescence (13-14 years old), relative to older adolescents (16-17 years old). Changes in socioemotional skills have a lasting (negative) impact on them as adults, especially among those affected early in their adolescence, in terms of their expressions of externalizing behavior (e.g., physical fighting) and behavioral control problems (i.e., substance abuse), as well as internalizing behavior (i.e., mental health) and in their (labor-market) optimism and expectations. This study highlights the permanent effects of uncertainty on socioemotional skills during formative years.

IZA DP No. 16187 (first version No. 15796), EPoS Economic Research Center Interview

Peer Effects in Financial Decisions

joint with Katja Kaufmann and Michaela Paffenholz 

We study whether, to what extent, and how families' financial decisions are affected by their peers, in particular by their (adult) siblings and by their coworkers. We provide causal evidence of peer effects in financial decisions, making use of Dutch administrative data and an IV strategy with partially overlapping peer groups. We find that positive asset market experiences of siblings, as well as coworkers, generate positive spillover effects in terms of first-time investments in risky assets. These effects are primarily driven by the siblings and the coworkers of the male partner in the couple, with the exception of full-time educated female partners for whom coworker spillovers are also important. Also, the effects of male coworkers appear to be more relevant. Heterogeneity analyses show that peer spillovers are particularly important for highly (financially) educated and more privileged couples, consistent with them having the financial means as well as the (financial) knowledge to be able to evaluate and respond to the signal of positive asset market experiences of peers. 

CRC TR 224 Discussion Paper No. 553

Child penalties and fertility across sectors 

joint with Sena Coskun and Husnu Dalgic

Women working in female-dominated industries tend to have higher fertility rates. We find that women exhibit significantly higher probabilities of switching to these industries before childbirth, as these sectors provide greater flexibility and lower ’per-child’ penalties, enabling higher fertility. Using a heterogeneous agent model with fertility and industry choice, we show that women strategically use sector choice and the time-expenditure trade-off to minimize child penalties. Our counterfactual analysis shows that if all women worked in non-linear sectors, by holding fertility the same, child penalty would be 29% higher. Furthermore, while fertility preference determines sector choice, sector choice in turn determines the type of motherhood; among women with similar wages, the ones in the linear sector favor quantity over quality and time over expenditure. Our findings highlight the endogeneity of fertility and child penalties, which must be considered when comparing groups across countries or studying their evolution over time.

Work in Progress

Gender pay gap in U.S. Science

joint with Bang Dinh Nguyen

Fertility Peer Effects

joint with Katja Kaufmann 

The effects of month-of-birth on short- and longrun health outcomes and educational achievement

joint with Cristina Bellés-Obrero and Katja Kaufmann