Impacts of Parental Health Shocks on Children’s Non-Cognitive Skills
ZEW Discussion Paper No. 13-032 // 2013Parental investments are crucial for the children’s skill development, especially in the early years of the life-cycle. In this paper, we examine how parental health, which may cause variation in investments to children’s skill formation, affects children’s development of specific non-cognitive skills in Germany. We observe how significant negative changes to parental health occurring early in children’s life affect children’s problem behavior measured when the children are approximately three and six years old.
Because of the potential endogeneity of parental health with respect to children’s outcomes, we consider shocks to parental health as an exogenous source of health variation rather than contemporary levels of health status. Thus, by using significant one period changes in the health variables rather than contemporary levels of health, we aim at identifying effects of exogenous changes in health rather than endogenously determined poor health ratings or health deterioration which is endogenous to child outcomes. Our data-base, the "mother and child data" from the German Socio-Economic Panel (GSOEP), also allows controlling for a variety of variables reflecting the children’s initial skill endowments (for instance birth weight, week of pregnancy at birth, birth order). Additionally, we conduct sensitivity tests with alternative shock sources and estimate placebo regressions on future parental health shocks to demonstrate the robustness of our results and test our identification assumption.
Our results imply that maternal health shocks in early childhood significantly affect children’s emotional symptoms, hyperactivity and conduct problems by the age of six. However, we do not find robust evidence for paternal health to affect the measured non-cognitive characteristics.
Westermaier, Franz, Brant Morefield and Andrea Mühlenweg (2013), Impacts of Parental Health Shocks on Children’s Non-Cognitive Skills, ZEW Discussion Paper No. 13-032, Mannheim.