TY - JOUR
T1 - Causal effects of family income on educational investment and child outcomes
T2 - Evidence from a policy reform in Japan
AU - Naoi, Michio
AU - Akabayashi, Hideo
AU - Nakamura, Ryosuke
AU - Nozaki, Kayo
AU - Sano, Shinpei
AU - Senoh, Wataru
AU - Shikishima, Chizuru
N1 - Funding Information:
This work was supported by JSPS KAKENHI Grant Numbers 16H06323 , 17H06086 , and 240000
Publisher Copyright:
© 2021 Elsevier Inc.
PY - 2021/6
Y1 - 2021/6
N2 - The Child Allowance Policy (CAP) in Japan, a nationwide cash transfer program for families with children, was designed to increase household expenditures toward children. Using unforeseen changes in the CAP that occurred due to the electoral results as a source of exogenous variation in income in the early 2010s, this paper examines the causal impact of family income on households’ private educational expenditures and child outcomes in the short-run, based on a longitudinal parent-child survey. The ordinary least squares (OLS) and first-differenced (FD) results show that family income is in most cases positively correlated with child's cognitive outcomes, and, to a lesser extent, with families’ educational expenditure on their children. Based on the FD instrumental variable (FD-IV) estimation, using unexpected changes in CAP payments as an instrument, we find positive income effects on educational expenditure in the short-run. However, we did not find statistically significant impacts on children's cognitive outcomes.
AB - The Child Allowance Policy (CAP) in Japan, a nationwide cash transfer program for families with children, was designed to increase household expenditures toward children. Using unforeseen changes in the CAP that occurred due to the electoral results as a source of exogenous variation in income in the early 2010s, this paper examines the causal impact of family income on households’ private educational expenditures and child outcomes in the short-run, based on a longitudinal parent-child survey. The ordinary least squares (OLS) and first-differenced (FD) results show that family income is in most cases positively correlated with child's cognitive outcomes, and, to a lesser extent, with families’ educational expenditure on their children. Based on the FD instrumental variable (FD-IV) estimation, using unexpected changes in CAP payments as an instrument, we find positive income effects on educational expenditure in the short-run. However, we did not find statistically significant impacts on children's cognitive outcomes.
KW - Child allowance
KW - Cognitive outcome
KW - Educational expenditure
KW - Family income
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U2 - 10.1016/j.jjie.2021.101122
DO - 10.1016/j.jjie.2021.101122
M3 - Article
AN - SCOPUS:85100908193
SN - 0889-1583
VL - 60
JO - Journal of The Japanese and International Economies
JF - Journal of The Japanese and International Economies
M1 - 101122
ER -