Inter-generational and Within-generation Spillovers in Human Capital Formation
Creators: name: McQuade, Gerry
Publisher: name: Lancaster University
Year: 2025
Subjects: Human capital
Cognitive skills
Non-cognitive skills
multigenerational transmission
Child development
Rainfall shocks
Foetal origins hypothesis
Regression discontinuity
in-utero shocks

description: This thesis consists of three pieces of applied work, each combining
 multiple data sources to investigate the short, medium and long-term
 determinants of health and human capital formation in Peru.
 
 
 Chapter 2 examines the multigenerational effects of maternal grandmothers’
 exposure to drought during pregnancy. Matching longitudinal data on the
 birthdate and location of the mother of Young Lives respondents in Peru
 with external climate data, I find that exposure to drought has a
 persistent negative impact on the health stock of the daughter and
 grandchild. Grandchildren display lower height-for-age, beginning in early
 childhood and persisting through adolescence, with the height gap widening
 as they enter puberty. Additionally, grandchildren have lower early-life
 weight-for-age, however this effect diminishes with age. The effect is
 strongest for grandsons, and isolated to grandmothers living in rural
 areas during exposure, with exposure in early pregnancy having the largest
 impact. The first generation are also affected, with mothers being shorter
 in stature in adulthood. Estimating the average controlled direct effect
 (ACDE), I find that the mother’s long-term health is the primary mediator
 for transmission between the first and second generation, although I
 cannot fully rule out other unobserved mechanisms. 
 
 
 Chapter 3 also matches Young Lives data to historical climate data to
 assess how exposure to rainfall shocks in early life can have a persistent
 influence on the development of personality traits in adolescence and
 adulthood. I find high rainfall exposure in the second and third years of
 life negatively affects scores. Additionally, high prenatal rainfall,
 specifically in the 3rd trimester, has a positive impact on scores, driven
 by girls and those in the poorest households. Examining underlying
 mechanisms, I find that parents increase labour supply in response to
 shocks, which has a negative impact on parent-child interaction in early
 life, with no effects on measures of material investments or child
 physical development. 
 
 
 Chapter 4 combines school administrative data with national standardised
 tests to identify siblings and estimate spillover effects in attainment
 arising from a public school-day extension reform. Using a regression
 discontinuity design based on school eligibility criteria, we estimate a
 positive effect of older siblings’ schooling on younger sibling attainment
 in reading and mathematics. Positive spillover effects are driven by the
 effect on girls, with the largest effect amongst sister-sister pairs,
 compared to null effects for younger brothers. Our results indicate that
 evaluations which consider only the benefits for the targeted child could
 systematically understate the benefit-cost ratio of educational reforms.