Nova workboard

a blog from young economists at Nova SBE

My family decides my future

It is a common fact that family background is a major determinant in the education production function for children. But how important is the childhood for an individual’s cognitive skills and future earnings? When looking at the impressive amount of empirical work done on the subject the most studies focus on the role of mothers. But the results are ambiguous.

Many American studies show that having a mother who stays at home compared to having a working mother has positive effects when it comes to school achievements. Ruhm (2004) finds negative effects of maternal employment in verbal ability of children aged 3 and 4 and on reading and mathematics for children ages 5 and 6. This negative effect is supported to have long run effects by Bernal (2008) that also uses American data and find that full-time maternal employment reduces children’s high school test scores. Furthermore, the negative effect of maternal employment is found to be more strongly negative among children of highly educated women (Gregg et al, 2005) and women with high socioeconomic status (Ruhm, 2008).

Looking at Northern European data positive or no effects are found. Dunifon et al. (2013, forthcoming) find using Danish register data a positive effect of mothers working full time in the first 3 and 15 years of their children’s life on the children’s performance in 9th grade. Furthermore, Rasmussen (2010) finds no effects of expanding the maternity leave by six weeks in Denmark in 1984 on high school enrollment, high school completion rates, and high school grades. Lastly, Rege et al (2011) find that children whose mothers lost their jobs in Norway due to a plant closing while the children were in eighth or ninth grade had a similar grade point average in 10th grade as other children.

The importance of the course of one’s childhood is emphasized by Heckman (2008). He concludes that 50 percent of inequality of the present value of lifetime earnings is due to factors determined by age 18. And the effect of family background as above discussed as maternal employment decisions does not only affect cognitive skill formation, but also many other skills, such as socioemotional skills, physical and mental health, perseverance, attention, motivation, and self confidence. All these skills are associated with higher procuctivity and lower inequality (Heckman, 2008).

Summarizing the above, family background plays an important role for a child’s educational attainment. Furthermore, when investing in reducing the inequalities of being born into a disadvantaged family, it is important to intervene at a early stage in the child’s life. Another challenge that prevail from the above results is that the effects of maternal employment is ambiguous. Recommendations of policy interventions cannot be generalized. Whether there are any significant cross-country differences needs to be investigated further. The political systems and the family life of USA and Northern Europe are very different, and could be possible drivers of the different results. But one main conclusion arises; your family decides a very big part of your future.   

By Anne

References

Bernal, R., 2008. “The Effect of Maternal Employment and Child Care on Children’s Cognitive Development,” International Economic Review 49(4): 1173-1209.

Dunifon, R, Hansen, A.T, Nicholson, S and Nielsen, L.P, 2013 –fourthcoming. ” The Effect of Maternal Employment on Children’s Academic Performance”.

Gregg, P., Washbrook, E., Propper, C., and Burgess, S., 2005. “The Effects of a Mother’s Return to Work Decision on Child Development in the UK,” The Economic Journal 115: F48-F80.

Heckman, J., 2008. “Schools, Skills, and Synapses”. Economic Inquiry, Vol 46(3): 289-324

Rasmussen, A.W., 2010. “Increasing the Length of Parents’ Birth-Related Leave: the Effect on Children’s Long-Term Educational Outcomes,” Labour Economics 17(1): 91-100.

Rege, M., Telle, K., and Votruba, M., 2011. “Parental Job Loss and Children’s School Performance,” Review of Economic Studies 78: 1462-1489.

Ruhm, C. J., 2004, “Parental Employment and Child Cognitive Development,” Journal of Human Resources 39(1): 156-192.

Ruhm, C. J., 2008, “Maternal Employment and Adolescent Development,” Labour Economics 15: 958-983.

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Author: studentnovasbe

Master student in Nova Sbe

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