Research

We study the determinants of parental educational time investment using a representative survey in the Netherlands. Informed by a simple model of parental time allocation, we design hypothetical scenarios to elicit beliefs about the human capital production function and preferences over within-family allocations of parental time and child outcomes. On average, respondents clearly favor higher educational time investments in lower-ability children. Our results suggest that this compensating investment is driven by a perceived substitutability between ability and investment as well as distributional preferences including a desire to equalize educational outcomes between siblings. We further test the malleability of parental investment behavior in an information provision experiment that randomly assigns respondents to receive either a low or high estimate of the heritability of primary school achievement. Respondents strongly update their beliefs in response to the information, but the treatment does not significantly alter perceived returns to investment, distributional preferences, or time allocations.

We develop a framework to evaluate income distributions from the perspective of an opportunity-egalitarian social planner. Through an original axiomatic route that bridges normative economics and decision theory under ambiguity, we characterize a class of social welfare functions governed by a single parameter capturing the planner’s aversion to inequality of opportunity. We obtain a ‘mean-divergence’ representation that separates economic efficiency from a penalty for inequality of opportunity, as well as a stochastic dominance criterion for robust welfare comparisons. We apply these theoretical results to analyze opportunity-sensitive social welfare in the United States across birth cohorts and regions. Mapping standard estimates of intergenerational mobility into our framework, we show that welfare rankings vary substantially with the assumed degree of inequality-of-opportunity aversion. We transparently gauge the extent of this normative ambiguity by providing bounds on the ranking of birth cohorts and regions, respectively.