Essays on Economics of Inequality and Skill Formation

This thesis consists of three Chapters investigating inequality and poverty from a human capital perspective. The first Chapter measures socio-economic (SES) gradients in test scores across countries, using data from international assessments, like Programme for International Student Assessment (PISA). Interestingly, SES gaps in PISA scores are not correlated with intergenerational earnings elasticities, but rather positively associated with SES gaps in parental investments. Surprisingly, Nordic countries show similar learning gaps to other European countries, suggesting limited equality of opportunity despite their generous social services. The second Chapter explores the intergenerational transmission of socio-emotional skills during childhood, using data from the 1970 British Cohort Study (BCS70) in the United Kingdom. This dataset enables me to measure internalizing and externalizing socio-emotional skills and use multiple measures of parents’ skills collected across their lifecycle. Findings reveal increasing persistence in skill transmission as parents age, with a stronger transmission observed from mothers to children. Additionally, leveraging data for three generations, I establish multi-generational persistence, namely a correlation between the grandmother’s internalising skill and the grandchildren’s skills, even after considering parental skills. The third Chapter investigates how to break the intergenerational transmission of inequalities by estimating the technology of skill formation in a family with siblings. Using the Millennium Cohort Study data in the United Kingdom, I introduce a novel variable, ”sibling bond”, which reflects how well siblings get along, and show that a stronger sibling bond is linked to persistent inequalities across households. I then structurally estimate the contribution of the sibling bond and parental investment to the formation of the younger and older siblings’ skills. The main finding is that a stronger sibling bond fosters both younger and older siblings’ human capital formation, even when accounting for parent-child interactions

Voting from abroad:Assessing the impact of local turnout on migrants’ voting behavior

Over 150 countries have laws allowing expatriate citizens to vote in their country of origin. Yet, little is known about their voting behavior and how this is affected by their host countries. Using unique micro-data on Chilean expatriates living in Europe and exploiting increases in the cost of voting caused by rainfall during the 2014 European Parliament election day in districts where Chileans reside, we show that 1 percentage point increase in the host-country local turnout decreases expatriates’ electoral participation in their home-country elections by nearly 1 percentage point. The result is driven by expatriates who were better integrated in the host-country societies. Evidence from surveys shows that higher host turnout promotes expatriates’ participation in host-country organizations and less in home-country organizations. Overall, our results suggest that in communities with high-political participation, migrants engage more with the local politics at the expense of their home-country politics.</p

Voting from abroad:Assessing the impact of local turnout on migrants’ voting behavior

Over 150 countries have laws allowing expatriate citizens to vote in their country of origin. Yet, little is known about their voting behavior and how this is affected by their host countries. Using unique micro-data on Chilean expatriates living in Europe and exploiting increases in the cost of voting caused by rainfall during the 2014 European Parliament election day in districts where Chileans reside, we show that 1 percentage point increase in the host-country local turnout decreases expatriates’ electoral participation in their home-country elections by nearly 1 percentage point. The result is driven by expatriates who were better integrated in the host-country societies. Evidence from surveys shows that higher host turnout promotes expatriates’ participation in host-country organizations and less in home-country organizations. Overall, our results suggest that in communities with high-political participation, migrants engage more with the local politics at the expense of their home-country politics.</p

Parental beliefs, perceived health risks, and time investment in children: Evidence from COVID-19

When deciding how to allocate their time among different types of investment in their children, parents weigh up the perceived benefits and costs of different activities. During the COVID-19 outbreak parents had to consider a new cost dimension when making this decision: the perceived health risks associated with contracting the virus. What role did parental beliefs about risks and returns play for the allocation of time with children during the pandemic? We answer this question by collecting rich data on a sample of first-time parents in England during the first lockdown, including elicitation of perceived risks and returns to different activities via hypothetical scenarios. We find that parents perceive their own time investment to be (i) more productive and (ii) less risky than the time spent by their children in formal childcare or with peers. Using open-ended questions about their pandemic experience and detailed time use data on children's daily activities, we then show that parental beliefs are predictive of actual investment choices, and are correlated with parental feelings derived from sentiment analysis. Lastly, we show that less educated parents perceive both lower returns and lower risks from investments, potentially causing a further widening of pre-existing inequalities in early years development, and suggesting the need for targeted informational interventions

Parental Investments and Socio-Economic Gradients in Learning across European Countries

Generous maternity leave, affordable daycare, extensive social safety nets, excellent universal health care, and high-quality public schools, are all notable features of Nordic countries. There is a widespread belief that such strong public investments in children contribute to a levelled playing field and promote social mobility. However, gaps in learning outcomes between children of rich and poor parents remain as high in Nordic countries as elsewhere in Europe. One explanation for this paradox is that the equalizing impacts of public investments are undone by parental investments in children of rich and poor families, which are as unequal in Nordic countries as in the rest of the European continent

Parental Beliefs, Perceived Health Risks, and Time Investment in Children: Evidence from COVID-19

When deciding how to allocate their time among different types of investment in their children, parents weigh up the perceived benefits and costs of different activities. During the COVID-19 outbreak parents had to consider a new cost dimension when making this decision: the perceived health risks associated with contracting the virus. What role did parental beliefs about risks and returns play for the allocation of time with children during the pandemic? We answer this question by collecting rich data on a sample of first-time parents in England during the first lockdown, including elicitation of perceived risks and returns to different activities via hypothetical scenarios. We find that parents perceive their own time investment to be (i) more productive and (ii) less risky than the time spent by their children in formal childcare or with peers. Using open-ended questions about their pandemic experience and detailed time use data on children's daily activities, we then show that parental beliefs are predictive of actual investment choices, and are correlated with parental feelings derived from sentiment analysis. Lastly, we show that less educated parents perceive both lower returns and lower risks from investments, potentially causing a further widening of pre-existing inequalities in early years development, and suggesting the need for targeted informational interventions

Voting from abroad: Assessing the impact of local turnout on migrants' voting behavior

Over 150 countries allow expatriate citizens to vote in their country of origin. Yet, little is known about their voting behavior and how this is affected by host countries. Using unique micro-data on Chilean expatriates living in Europe, we study how the host country's turnout affects expatriates' electoral participation in the 2017 Chilean Presidential election. We focus on the 2014 European Parliament election turnout in the district of the Chilean's geocoded residence and exploit local transitory shocks to the cost of voting given by the rainfall on the day of the election. We find that migrants living in areas with higher political participation have lower engagement with their home country politics. A 1 percentage point increase in the host country's turnout decreases the electoral participation of Chilean expatriates by nearly 1 percentage point. The effects are stronger for young Chileans and those living in small communities, and in localities more welcoming to migrants. This suggests that integration into their local environment seems to play an important role on shaping political preferences