Program Meeting on Children
The NBER's Program on Children held its spring meeting in Cambridge on April 6. Program Director Jonathan Gruber of MIT chose these papers for discussion:
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Sacerdote measures peer effects among college-age roommates. He finds that among Dartmouth College freshmen roommates and dormmates, who are randomly assigned, peer effects help to determine levels of academic effort and such social decisions as whether to join a fraternity. In other major life decisions, such as the choice of college major, residential peer effects are markedly absent. Peer effects on GPA occur at the individual room level, whereas peer effects on fraternity membership occur at both the room and dorm level, Sacerdote finds. Also, freshmen with high social ability are likely to remain with their roommates in their sophomore year, but freshmen with high academic ability are less likely to keep their roommates.
Middle-class parents, who earn too much to qualify for the Earned Income Tax Credit but too little to gain much benefit from tax deductions, might be said to face a kind of middle-class-parent penalty relative to their poorer and richer counterparts. This middle-class-parent penalty not only raises issues of fairness, it also generates marginal tax rates and marriage penalties for moderate-income families that are as high or higher than those facing wealthier taxpayers. Ellwood and Liebman document how the tax benefits from children vary with income, and they illustrate the impact of those benefits on marginal tax rates and marriage penalties. They then examine five proposals for reducing or eliminating the middle-class-parent penalty and the high marginal tax rates and marriage penalties it produces.
Case, Lin, and McLanahan examine resource allocation in step households in the United States and South Africa to test whether investments in children vary according to economic and genetic bonds between parent and child. Using 18 years of data on food expenditure by family type, holding constant household size, age composition, and income, the authors find that in those households in which a child is raised by an adoptive, step, or foster mother, less is spent on food. In South Africa, when a child's biological mother is the head or spouse of the head of household, the household spends significantly more on food, in particular on milk, fruit, and vegetables, and significantly less on tobacco and alcohol. The genetic tie to the child, and not any anticipated future economic tie, appears to be the tie that binds.
Figlio and Ludwig examine the effects of private schooling on adolescent drug use, sexual activity, fertility, and arrests. They exploit the variation across metropolitan areas in the costs that parents face in transporting their children to private schools, stemming from differences in the quality of the local transportation infrastructure (such as availability of public transportation and roadway congestion), the geographic concentration of private schools throughout the metropolitan area, and whether the state government subsidizes private-school transportation. The authors find that most of the differences in nonmarket adolescent behaviors between religious private, nonreligious private, and public schools can be accounted for by differences in student and family characteristics. However, religious private schools do appear to reduce teen sexual activity; still, an accompanying reduction in the use of birth control leads to a net increase in the unconditional probability of teen fecundity.
Todd, Behrman, and Cheng evaluate the effects of a preschool enrichment program in a developing country on cognitive, psychosocial, and anthropometric outcomes. These outcomes are all highly dependent on age and duration of exposure to the program. The authors' estimates are based on three comparison groups: children in the communities in which the program was introduced who were not in the program; children in similar communities in which the program had not yet been introduced; and children who were in the program for a month or less. The preschool program increases cognitive and psychosocial test scores, but only for children who participated in the program for at least seven months, they find. The anthropometric results for weight differ substantially depending on which comparison group is used, though. The authors' preferred estimates based on the third comparison group indicate that the program tends to improve the anthropometric outcomes, with initially increasing effects as the duration of participation in the program increases. Cost-benefit analysis based on these estimates and other assumptions indicate fairly high rates of return for this program.
Duflo studies the impact of a cash transfer program on child health in South Africa. In the early 1990s, the benefits and coverage of the South African social pension program were expanded for the black population. This reform provides a unique opportunity for estimating the impact of an increase in cash transfers on child health, as well as the differences in impact attributable to the gender of the transfer recipient. About one-third of black South African children under age five live with an elderly person. Estimates in this study suggest that pensions received by the maternal grandmother have a large impact on the anthropometric status of children, girls in particular. Duflo finds no similar effect when a man is the pension recipient, or when it is received by the paternal grandmother.