Within-Family Dynamics of Human Capital Formation: Experimental Evidence on Parental Time Investment

Abstract

We study the determinants of parental educational time investment using a representative sample from the Netherlands. Informed by a simple model of parental time allocation, we design hypothetical scenarios to elicit beliefs about the human capital production function and within-family inequality attitudes. On average, respondents clearly favor higher educational time investments in lower-ability children. Our results suggest that this compensating investment is driven by a desire to equalize educational outcomes between siblings, as well as a perceived substitutability between ability and investment. We further test the malleability of parental investment behavior in an information provision experiment that randomly assigns respondents to receive either a low or high estimate of the heritability of primary school achievement. Respondents randomly assigned to the high heritability estimate invest slightly more in the lower-ability child, but the treatment does not affect perceived returns to investment or distributional attitudes.