Miriam Gensowski, Rockwool Foundation Research Unit - Public and Parental Investments, and Children’s Skill Formation

Title: Public and Parental Investments, and Children’s Skill Formation

Abstract: This paper studies theoretically and empirically the interaction between parental and public inputs in children's skill formation when families sort into institutions of differing quality. Our model shows that the effects of public investments depend on the elasticity of substitution between inputs made at home and in institutions. We test this using register and survey data on participants in a randomized treatment that increased preschool quality. The treatment improved longer-run skills for children from disadvantaged backgrounds, thereby reducing skill gaps, with parental responses as mediators. This is only compatible with inputs made at home and in institutions being substitutes.

Presenter: Miriam Gensowski, Rockwool Foundation Research Unit

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