Kjell Salvanes, Norwegian School of Economics

Coautores: Pedro Carneiro, Barton Willage, and Alexander Willén

Paper: Childhood Shocks Across Ages and Human Capital Formation

Abstract: We provide estimates of the causal impact of shocks to home environments during childhood on the human capital formation of children and their adult earnings, and document how these impacts differ depending on the age of the child when the shock occurs. We do so by comparing the outcomes of children whose parents experienced an involuntary job loss at different points in time. The rich data we have access to enable us to examine a broad range of short- and long-term educational outcomes related to performance, attainment, and behavior. In addition, for a subsample of our cohorts we can explore earnings effects at age 30. Consistent with other studies, we confirm that early childhood represents a crucial time for acquiring skills and abilities, but also establish that changes in the home environment for children in early adolescence matter as much, and sometimes more. We rationalize these results by noting that sensitive periods for different skills occur at different stages of childhood. Furthermore, it is during early adolescence that children face key junctures in their educational choices.