Three essays on human capital: investments, resilience, and spillovers

This thesis contains three studies focusing on different dimensions of human capital: investment decisions, resilience, and spillovers. Chapter 1 investigates the importance of subjective expectations of returns to and effort costs of maternal investments in newborns. We find heterogeneity across mothers in expected effort costs and expected returns for outcomes in the cognitive, socio-emotional, and health domains. While this contributes to explaining heterogeneity in investments, we find no significant differences in preferences for child developmental outcomes. The findings from simulating the impact of various policies on investments highlight the relevance of interventions designed to reduce perinatal fatigue alongside interventions that increase perceived returns to investments in children. Chapter 2 exploits the expansion of a large-scale health insurance program in Mexico and variation in local rainfall levels to estimate whether the increase in healthcare coverage protected the educational attainment of primary school children in the event of adverse climatic shocks. Results show that the universalization of healthcare mitigated the negative effect of atypical rainfall on test scores, particularly in more marginalized and rural areas. An analysis of the mechanisms shows a reduced incidence of sickness among children, lower demand for their time, and higher stability in household consumption among program-eligible families exposed to rainfall shocks. Chapter 3 explores whether parents benefit from bringing up and investing in children. I instrument sibship size by exploiting gender preferences among Chinese households and address the endogeneity of parental investments by leveraging an extension to the minimum compulsory schooling. In a context of low state welfare provision I find that while the quantity of children has a null direct effect on the physical, mental, or cognitive health of parents in later life, the reform-induced increase in daughters’ education improved the physical and cognitive health of mothers, reducing the gender gap in health outcomes among older generations.