Dynamic Complementarities Very Early in Life: Family Planning, Early Childhood Education, and Lifetime Human Capital

Shuqiao Sun , University of Michigan

This paper examines the long-run effects of individual’s childhood environment on human capital and the complementarities between family environment and education. Using data from the PSID and a restricted-use file that links individual to their county of birth, I document evidence of better-planned childhood environment induced by abortion legalization, and its interaction with improved preschool access. Variation in the timing of abortion legalization creates natural experiments but also sample selections that might cause confounding compositional changes. To avoid selection biases, I focus on the older siblings from a quantity-quality perspective instead of the cohorts born after the policy change. The results indicate substantial human capital gains over the life cycle for individuals born immediately before abortion was legalized, who are less likely to have unexpected younger siblings. The estimates on the interaction with Head Start then provide novel evidence of dynamic complementarities in human capital formation very early in life.

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 Presented in Session 173. Long-Term Effects of Early-Life Circumstances