Parental inputs and socio-economic gaps in early child development

Around 1 in 5 individuals across OECD countries leave school without basic qualifications, impacting their own later life outcomes and those of their children. We document the impact of a compulsory schooling reform, which raised the education of the marginal mother from leaving school with no qualifications to having at least a basic level of qualifications, on their children’s cognitive and socio-emotional outcomes in childhood. We further estimate the causal effect of this reform on a range of parental inputs, which we show are associated with children’s human capital development. Our results suggest that family resources and parental investments, including health behaviours during pregnancy and monetary investments at home, are causally impacted by the educational reform and, when coupled with their association with human capital, can each explain between 12-60% of the effect of the reform on the second generations’ skills.