Publication: The psychological effects of poverty on investments in children’s human capital
The psychological effects of poverty on investments in children’s human capital
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Lichand, G., Bettinger, E., Cunha, N., & Madeira, R. (2021). The psychological effects of poverty on investments in children’s human capital (No. 349; Working Paper Series / Department of Economics).
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Do poor parents respond inefficiently to future returns on investments, even when they would have the financial means to invest optimally? Combining multiple experiments, we document that when parents of high-school students in Brazil are offered the opportunity to invest in an educational program, (1) prior experience with the program closes the gap in willingness to invest between high- and low-SES parents, but (2) financial worries reopen that gap. We show that financial worries lead parents to respond to small but immediate return
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Lichand, G., Bettinger, E., Cunha, N., & Madeira, R. (2021). The psychological effects of poverty on investments in children’s human capital (No. 349; Working Paper Series / Department of Economics).
