Parenting, Birth Order and School Achievement

Interest on the e¤ects of birth order on human capital accumulation has been reinvigorated after the publication of Black, Devereux & Salvanes (2005) (BDS, from now on) who …nd large and robust e¤ects of birth order on educational attainment with Scandinavian data. However, despite the convincing results, the underlying causal mechanisms generating this …nding remain somewhat unknown. Indeed, BDS acknowledge: "...One important issue remains unresolved: what is causing the birth order e¤ects we observe in the data? Our …ndings are consistent with optimal stopping being a small part of the explanation. Also, the large birth order e¤ects found for highly educated mothers, allied with the weak evidence for family size e¤ects, suggest that …nancial constraints may not be that important. Although a number of other theories (including time constraints, endowment e¤ects, and parental preferences) have been proposed in the literature, we are quite limited in our ability to distinguish between these models...." In thinking about children’s behavior it is important to remember that parents can resort to a variety a mechanisms to in‡uence it. In particular, they can limit or grant access to important sources of utility for children. This paper advances two channels that have not been previously considered in the generating process for birth order e¤ects in educational outcomes: we consider di¤erential discipline schemes arising from a) the dynamics of a parental reputation mechanism and/or b) the changing constraints in the technology of punishment. In particular, we hypothesize that altruistic parents have incentives to invest in reputation by committing to tough parenting with those born earlier in the hope of inducing their (paternalistic) preferred school e¤ort levels on those born later.1 Alternatively, the technology of punishment available to parents might change as children grow up . This may happen because the earlier born who was once handled alone, now interacts with later born siblings, changing the relative costs of alternative punishment schemes. The literature on birth order e¤ects in education in not minor. Zajonc (1976), Olneck & Bills (1979), Blake (1981), Hauser & Sewell (1985), Behrman & Taubman (1986), among others, found mixed results that provide support for a variety of birth order theories ranging from the "no-one-to-teach-hypothesis" to the theory of di¤erential genetic endowments. However, with the strong birth order e¤ects found in Behrman & Taubman (1986) and, more recently, 1See Hao, Hotz & Jin (2007) who …nd evidence supporting this hypothesis when examining birth order e¤ects in teeangers’ risky behaviors. A key insight of this paper is that birth order e¤ects arise endogenously as the result of parent-child interactions in the reputation game as parents play tough on older children in an attempt to build a reputation that disciplines the youngest ones.