Parental Human Capital Investment Responses to Children’s Disability
Posted: 12 Dec 2017 Last revised: 18 Aug 2020
Date Written: October 30, 2019
Abstract
One of the potential explanations for the well-documented school participation deficit
associated with disabilities is that parents underinvest in the education of disabled children.
Alternatively, inequality averse parents may reduce the education gap associated
with disabilities. This paper proposes a simple theoretical framework and an estimation
strategy aimed at investigating whether parental decisions to invest in the education of
disabled children are driven by equality or efficiency. Even if parents are inequality averse,
they may still choose to invest more in non-disabled children than in disabled children if
education of disabled individuals is more costly than the education of non-disabled. This
implies that comparisons of parental investments across siblings with different health conditions
(such as the ones underlying sibling fixed effects models) do not necessary yield
an unambiguous conclusion about parental inequality aversion. By means of a general
preference model, I show that variation in family size and children’s disability can be used
to infer whether parents are averse to inequality or if, instead, they care more about efficiency.
In particular, I exploit the fact that parents of only children cannot possibly exhibit
inequality aversion. I apply this identification strategy to Mexican cross-sectional data and
find evidence that equality matters for parents, and that it does so more if they have sons
than if they have daughters.
Keywords: inequality aversion, disability, parental responses, intra-household allocation, human capital formation, entropy balancing
JEL Classification: D13, I12, I14, J13, J14
Suggested Citation: Suggested Citation