Do Parents Matter More Than Country?

Several years ago, I linked to a Brookings post that highlighted parenting as having a massive effect on children’s outcomes. I was reminded of it while reading a 2016 post at the World Bank’s Development Impact blog. The author David McKenzie, Lead Economist in the Development Research Group, writes,

I was surprised by a paper by Todd Schoellman in the most recent AEJ Macro which argues that parents, not country, are what matters for early childhood development.

He studies the adult outcomes of refugees who immigrated to the U.S. as children, but who differed in the age of arrival. The main analysis is on IndoChinese refugees fleeing the Vietnam War and Khmer Rouge. The thought experiment is to compare the labor market outcomes and completed education of a refugee who arrived at age 1 to one who arrived at age 3 or 4. The latter had 2 or 3 more years of that critical early childhood period in a poor country (Vietnam, Laos and Cambodia) where conflict was going on, and then both come to the U.S. and grow up there.  The key result is seen in this graph – which shows that adult wages are no different for those who arrived at age 4 or 5 versus those who arrive at age 0 or 1:

Schoellman argues (according to McKenzie)

that the theory most consistent with this data is that parents, rather than country environment, are the most important inputs to early childhood human capital formation. Of course one can argue that country environment in turn shapes parents – it determines parental education, parental wealth, etc. But the result that parents, and not goods or place, matter is a surprising one. By the way, if you are worried about external validity, he shows the same flatness of log wages with respect to age of arrival between 0 and 5 also holds for Ethiopian and Afghani refugees, Cuban immigrants, Mexican immigrants, and for the set of immigrants from poor countries as a whole.

If you want to argue about another type of external validity, I would argue that the U.S. may not be very good at providing early childhood care for refugees (at least at the time of the study) – this is not discussed in the paper, but it seems likely to me that the U.S. is a worse place to receive early childhood care if you are a poor family than most European countries or Australia and New Zealand – so perhaps it is only when you get into public schools here that you start to get the benefits. The type of data the authors have doesn’t tell us anything about what early childhood educational facilities, if any, were available to these refugee kids.

You can read a working paper version of the study here.