CFDP 2026R2

Human Capital Development and Parental Investment in India

Publication Date: December 2015

Revision Date: July 2017March 2019

Pages: 64

Abstract: 

We estimate production functions for cognition and health for children aged 1-12 in India, based on the Young Lives Survey. India has over 70 million children aged 0-5 who are at risk of developmental deficits. The inputs into the production functions include parental background, prior child cognition and health, and child investments, which are taken as endogenous. Estimation is based on a nonlinear factor model, based on multiple measurements for both inputs and child outcomes. Our results show an important effect of early health on child cognitive development, which then becomes persistent. Parental investments affect cognitive development at all ages, but more so for younger children. Investments also have an impact on health at early ages only.

Keywords: 

Early childhood development, Human capital, India, Nonlinear factor models, Young lives survey, Health, Cognition

JEL Classification Codes: I14, I15, I25, I32, J13, J24, O15

JEL Classification Codes: I14I15I25I32J13J24O15