skip to content

Faculty of Economics

Journal Cover

Boneva, T. and Rauh, C.

Parental Beliefs about Returns to Educational Investments - The Later the Better?

Journal of the European Economic Association

Vol. 16(6) pp. 1669–1711 (2018)

Abstract: In this paper, we study parental beliefs about the returns to parental investments made during different periods of childhood. Using two independent samples, we document that parents perceive the returns to different late investments to be higher than the returns to early investments, and that they perceive investments in different time periods as substitutes rather than complements. We show that parental beliefs about the returns to investments vary substantially across the population and that individual beliefs are predictive of actual investment decisions. Moreover, we document that parental beliefs about the productivity of investments differ significantly across socioeconomic groups. Perceived returns to early parental investments are positively associated with household income, thereby potentially contributing to the intergenerational persistence in earnings.

JEL Codes: I24, I26, J13, J24, J62

Author links: Christopher Rauh  

Publisher's Link: https://doi.org/10.1093/jeea/jvy006



Papers and Publications



Recent Publications


Bhattacharya, D., Dupas, P. and Kanaya, S. Demand and Welfare Analysis in Discrete Choice Models with Social Interactions Review of Economic Studies [2023]

Elliott, M., Golub, B. and Leduc, M. V. Supply Network Formation and Fragility American Economic Review [2022]

Ding, Y. A Simple Joint Model for Returns, Volatility and Volatility of Volatility Journal of Econometrics [2023]

Chen, J., Elliott, M. and Koh, A. Capability Accumulation and Conglomeratization in the Information Age Journal of Economic Theory [2023]