This dissertation examines how variables related to child quality and household structure affect parental decision-making regarding the allocation of familial resources within the household.
The first chapter studies the role of family composition on household decision-making regarding consumption of boys’ and girls’ education and clothing. I test the unitary model by examining expenditures from partner specific non-labor income received under a conditional cash transfer program (Oportunidades) and other jointly held non-labor income. An IV-SUR model with bootstrapped standard errors is estimated where village Oportunidades status instruments mother’s Oportunidades income. The full sample results show singular preferences for clothing but differing preferences for education. Splitting by family composition reveals that pooling is rejected for educational expenses for all but daughter-only households, while it is rejected for clothing for mixed and daughter-only households. Moreover, tests show that Oportunidades income is not spent in the same manner on girls’ and boys’ clothing in mixed families. The results indicate that income pooling is a function of the category of goods being examined and the structure of the household, with child gender playing a role in decision-making in mixed families.
The second chapter examines the link between parental educational investments and endowments by testing whether parents reinforce or compensate differences in children’s height, BMI and ability. The analysis distinguishes between beneficiary and non-beneficiary households under the Oportunidades program and estimates OLS and family fixed effects (FE) models. Overall, the results are consistent with reinforcing patterns of investment for children from beneficiary and non-beneficiary households. In particular, parents are reinforcing differences in child ability, with results holding for boys regardless of beneficiary status in the FE model. The FE model also shows that parents reinforce ability in girls only if their ability z-score is positive. Moreover, there is evidence of reinforcement with regard to child height and BMI. Finally, whether parents compensate or reinforce depends on the timing of the Oportunidades transfer: if households are currently non-beneficiaries but expect to receive transfers in the next period, then parents compensate ability (in girls).
The third chapter explores schooling decisions at the primary school level in rural Pakistan. I investigate the role of child quality, and school and household characteristics on primary schooling. Before examining school choice the analysis establishes that average achievement levels in private schools are higher than those in public schools, allowing for a ranking of schooling decisions: 0 = Not Enrolled, 1 = Enrolled in Public, and 2 = Enrolled in Private. School choice is analyzed using a Generalized Ordered Logit model. The results show that parents value (relative) intelligence and diligence differently: children ranked as more intelligent that their siblings attend private schools while more diligent children attend public schools. Moreover, children from richer households and those from higher socio-economic classes are more likely to be enrolled. Finally, for some school traits parents have unchanging valuations while for others valuations differ according to school type.