Ozdemir, Yasemin (2019). Parental Investment and Peer Effects in Cognitive and Non-Cognitive Skills.
This paper investigates whether and how parents adjust their parenting behavior in response to their children's peers. In particular, I analyze whether changes in cognitive and non-cognitive skills of children's classmates lead parents to adjust their investment and practices such as monitoring and quality time spend with their children. Data from the National Longitudinal Study of Adolescent to Adult Health (Add Health) allows me to follow five cohorts of teenagers from 7th to 12th grade with repeated information on their individual friendship networks. Combing the empirical strategy of overlapping peer groups and first-differencing, I estimate a simultaneous system of skill and investment equations via 3SLS. First results indicate that parents respond differently to certain skill dimensions of peers. In terms of peers, they respond more strongly in the dimension of spending social time with their children than talking about problems their child might be having at school, while for their own child's skills the opposite is true.
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