Human capital investments and family composition

Abstract

This study explores how human capital investment of a child is affected by the number and the gender of his/her siblings. Two alternative explanations are tested for: competition for scarce resources versus direct interactions between siblings. An empirical application is provided using Brazilian data.

Acknowledgement

We would like to thank Christelle Dumas and Simon Cauchemez who provided excellent research assistance.

Notes

¹ The fact that direct interactions between children arise from parental preferences is not crucial for this result to hold. A similar result can be obtained in models where direct interactions no longer come from the parental preferences but from the family production function.