|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CEE | CEP | FMG | SERC | STICERD||Cookies?|
Paper No' CEEDP0120: | Full paper
Save Reference as: BibTeX File | EndNote Import File
Keywords: Income; pupil outcomes, shocks
JEL Classification: D12; J13
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEE Discussion Papers
Share this page: Google Bookmarks | Facebook | Twitter
Abstract:How do shocks to parental income drive adolescent human capital, including years of schooling, high school dropout, university attendance, IQ and health? A structural model decomposes household shocks into permanent and transitory components, then the effect of shocks at age 1-16 is estimated for 600,000 Norwegian children. The effect of permanent shocks declines - and of transitory shocks is small and constant across child age, suggesting parents optimise similarly to consumption. However there is a lower effect of transitory shocks for liquidity constrained parents. An interpretation is that these parents use income shocks for essential consumption rather than investment.
Copyright © CEE & LSE 2003 - 2017 | LSE, Houghton Street, London WC2A 2AE | Tel: +44(0)20 7955 7673 | Email: firstname.lastname@example.org | Site updated 27 July 2017