nep-neu New Economics Papers
on Neuroeconomics
Issue of 2019‒02‒11
six papers chosen by

  1. Parental Beliefs about Returns to Different Types of Investments in School Children By Orazio Attanasio; Teodora Boneva; Christopher Rauh
  2. Preschoolers' Self-Regulation, Skill Differentials, and Early Educational Outcomes By Quis, Johanna Sophie; Bela, Anika; Heineck, Guido
  3. Do Health Shocks Modify Personality Traits? Evidence from Locus Of Control By Antoine Marsaudon
  4. Human frictions in the transmission of economic policy By D'Acunto, Francesco; Hoang, Daniel; Paloviita, Maritta; Weber, Michael
  5. New ways to measure well-being? A first joint analysis of subjective and objective measures By Andrén, Daniela; Clark, Andrew E.; D’Ambrosio, Conchita; Karlsson, Sune; Pettersson, Nicklas
  6. The rising return to non-cognitive skill By Edin, Per-Anders; Fredriksson, Peter; Nybom, Martin; Öckert, Björn

  1. By: Orazio Attanasio; Teodora Boneva; Christopher Rauh
    Abstract: Parental investments as well as school quality are important determinants of children’s later-life outcomes. In this paper, we shed light on what determines parental investments and study how parents perceive the returns to parental time investments, material investments and school quality, as well as the complementarity/substitutability between the different inputs. Using a representative sample of 1,962 parents in England, we document that parents perceive the returns to 3 hours of weekly parental time investments or £30 of weekly material investments to matter more than moving a child to a better school. Parents perceive the returns to time and material investments to be diminishing and perceive material investments as more productive if children attend higher quality schools. Perceived returns do not differ with the child’s initial human capital or gender and, surprisingly, we find no differences in perceived returns by the parents’ socioeconomic background. Consistent with parental beliefs playing an important role in parental investment decisions, perceived returns are found to be highly correlated with actual investment decisions.
    JEL: I24 J13 J24 J62
    Date: 2019–01
  2. By: Quis, Johanna Sophie (University of Bamberg); Bela, Anika (Leibniz-Institut für Bildungsverläufe (LIfBi)); Heineck, Guido (University of Bamberg)
    Abstract: Are there skill differentials in young children's competence levels by their self-regulation abilities and do such early life differences mark the onset of increasing disparities in competence development? We add to previous research by investigating the relationship between preschoolers' self-regulation and their mathematical competence and its development early in primary school. We use data from the kindergarten cohort of the German National Educational Panel Study (NEPS) which provides observations of self-regulatory behavior as well as mathematical skills and allows controlling for a rich set of relevant background variables. Our results imply a positive association between children's self-regulation and their mathematical competence levels, even when holding general cognitive ability in kindergarten constant. Yet, self-regulation is not related to competence development over the first two years of primary school, meaning that the initial skill gap neither widens nor narrows substantially. Heterogeneity analyses indicate that self-regulation benefits children with low initial levels of mathematical competence at the transition from kindergarten to primary school. No growth gradient, however, is observable between grade 1 and grade 2.
    Keywords: self-regulation, skill formation, competence development
    JEL: I21
    Date: 2019–01
  3. By: Antoine Marsaudon (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris)
    Abstract: This paper analyzes whether a personality trait, that is, locus of control, is stable after the occurrence of a health shock, namely a hospital stay. To do so, we use the German Socio-Economics Panel dataset. To identify the causal effect of such a shock on locus of control, we rely on a fixed-effects model. Results suggest that individuals facing health shocks are more likely to decrease their locus of control. That is, they tend to believe that their future outcomes are more determined by external factors than their own will. This decrease is attributable to individuals that had, prior to the shock, lower values of locus of control. Further, individuals facing severe hospital stays (i.e., measured by the number overnights) and those with chronic diseases (i.e., measured by the number of hospital stays within a year), have a higher LOC decline than others. This provides evidence that perception of control is not constant over time and could change after experiencing a traumatic health event.
    Keywords: Health shocks,Locus of control,Hospital stays,Panel data,Fixed-effect model
    Date: 2019–02
  4. By: D'Acunto, Francesco; Hoang, Daniel; Paloviita, Maritta; Weber, Michael
    Abstract: Intertemporal substitution is at the heart of modern macroeconomics and finance as well as economic policymaking, but a large fraction of a representative population of men - those below the top of the distribution by cognitive abilities (IQ) - do not change their consumption propensities with their inflation expectations. Low-IQ men are also less than half as sensitive to interest-rate changes when making borrowing decisions. Our microdata include unique administrative information on cognitive abilities, as well as economic expectations, consumption and borrowing plans, and total household debt from Finland. Heterogeneity in observables such as education, income, other expectations, and financial constraints do not drive these patterns. Costly information acquisition and the ability to form accurate forecasts are channels that cannot fully explain these results. Limited cognitive abilities could be human frictions in the transmission and effectiveness of fiscal and monetary policies that operate through household consumption and borrowing decisions.
    Keywords: Macroeconomic Beliefs,Limited Cognition,Heterogeneous Agents,Fiscal and Monetary Policy,Survey Data,Household Finance
    JEL: D12 D84 D91 E21 E31 E32 E52 E65
    Date: 2019
  5. By: Andrén, Daniela (Örebro University School of Business); Clark, Andrew E. (Paris School of Economics); D’Ambrosio, Conchita (Université du Luxembourg); Karlsson, Sune (Örebro University School of Business); Pettersson, Nicklas (Örebro University School of Business)
    Abstract: Our study is, to our knowledge, the first joint analysis of subjective and objective measures of well-being. Using a rich longitudinal data from the mothers pregnancy until adulthood for a birth cohort of children who attended school in Örebro during the 1960s, we analyse in a first step how subjective (self-assessed) and objective (cortisol-based) measures of well-being are related to each other. In a second step, life-course models for these two measures are estimated and compared with each other. Despite the fact that our analysis is largely exploratory, our results suggest interesting possibilities to use objective measures to measure well-being, even though this may imply a greater degree of complexity.
    Keywords: subjective and objective well-being; general life satisfaction; cortisol; birth-cohort data; adult; child and birth outcomes; multivariate imputation
    JEL: A12 D60 I31
    Date: 2019–01–27
  6. By: Edin, Per-Anders (Uppsala University); Fredriksson, Peter (Uppsala University); Nybom, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy); Öckert, Björn (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We examine the changes in the rewards to cognitive and non-cognitive skill during the time period 1992-2013. Using unique administrative data for Sweden, we document a secular increase in the returns to non-cognitive skill. This increase is particularly pronounced in the private sector, at the upper-end of the wage distribution, and relative to the evolution of the return to cognitive skill. Sorting across occupations responded to changes in the returns to skills. Workers with an abundance of non-cognitive skill were increasingly sorted into abstract and nonroutine occupations, for example. Such occupations also saw greater increases in the relative return to non-cognitive skill. This suggests that the optimal skill mixes of jobs have changed over time, that there is sorting on comparative advantage, and that demand-side factors are primarily driving the evolution of the return to non-cognitive skill. Consistent with this, we also show that hikes in o shoring and IT-investments increase the relative reward to non-cognitive skill and the relative intensity of non-cognitive skill usage.
    Keywords: Wage inequality; sorting; skill returns; cognitive/non-cognitive skill
    JEL: J24 J31
    Date: 2018–11–16

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