Essays on the Economics of Human Capital

Abstract

An extensive literature documents the instrumental role of early childhood in improving individuals' life chances. This dissertation consists of three connected chapters that study the effects of early childhood circumstances on human capital formation and its economic consequences.

The first chapter examines the impact of family size on children's long-term wellbeing. The number of siblings is a prominent aspect of childhood family environments that affects parental time and resource investments. Leveraging temporal and county-level variation in access to abortion in the United States during the 1970s, my research design contrasts the adult outcomes of children born just before an abortion clinic became available with the adult outcomes of children born in counties in which abortion remained difficult to obtain. The results suggest that access to abortion decreases the completed number of younger siblings. As their parents avoided unplanned children and achieved smaller family sizes, the children experienced significant improvements in their long-run outcomes, including increased educational attainment, greater labor-force participation, and higher neighborhood quality. The effects also appear to complement the benefits of safety net programs. These findings imply large, persistent returns to reproductive health policies that promote smaller families.

The second chapter, with Martha Bailey and Brenden Timpe, evaluates the long-run effects of Head Start using large-scale, restricted 2000-2013 Census data linked to date and place of birth in the Social Security Administration's Numident file. Using the county-level roll-out of Head Start between 1965 and 1980 and state age-eligibility cutoffs for school entry, we find that childhood participation in Head Start is associated with increases in adult human capital and economic self-sufficiency, including a 0.29-year increase in schooling, a 2.1-percent increase in high-school completion, an 8.7-percent increase in college enrollment, and a 19-percent increase in college completion. These estimates imply sizable, long-term returns to investing in large-scale preschool programs.

The third chapter, with Wanchuan Lin and Juan Pantano, investigates one underlying mechanism behind the birth order effects on various individual outcomes, with later-born children faring worse than their siblings. We leverage U.S. data on pregnancy intention to study the role of unwanted fertility in the observed birth order patterns. We document that children higher in the birth order are much more likely to be unwanted, in the sense that they were conceived at a time when the family was not planning to have additional children. Being an unwanted child is associated with negative life-cycle outcomes as it implies a disruption in parental plans for optimal human capital investment. We show that the increasing prevalence of unwantedness across birth order explains a substantial part of the documented birth order effects in education and employment. Consistent with this mechanism, we document no birth order effects in families who have more control over their own fertility.