title: Intrahousehold resource allocation: do parents reduce or reinforce child ability gaps?
abstract: Do parents invest more or less in their high-ability children? We provide new evidence on this question by comparing observed ability differences and observed investment differences between siblings living in the United States. To overcome endogeneity issues, we use sibling differences in handedness as an instrument for cognitive ability differences. We find that parents invest more in high-ability children, with a 1 standard deviation increase in child cognitive ability increasing parental investments by approximately one-third of a standard deviation. Consequently, differences in child cognitive ability are enhanced by differential parental investments.
authors.affiliation: School of Economics, University of Queensland, Brisbane, Queensland, 4072, Australia, p.frijters@uq.edu.au.
authors.forename: Paul
authors.initials: P
authors.lastname: Frijters
authors.forename: David W
authors.initials: DW
authors.lastname: Johnston
authors.forename: Manisha
authors.initials: M
authors.lastname: Shah
authors.forename: Michael A
authors.initials: MA
authors.lastname: Shields
mesh_terms: D002648:Child; D002657:Child Development; D003071:Cognition; D003657:Decision Making; D005260:Female; D007839:Functional Laterality; D006801:Humans; D008137:Longitudinal Studies; D008297:Male; D010287:Parent-Child Relations; D016487:Parenting / Q000523:psychology* / Q000639:trends; D012044:Regression Analysis; D040841:Resource Allocation; D035781:Siblings; D014481:United States