The Interactive Effect of Birth Weight and Parental Investment on Child Test Scores

This paper explores how observed and unobserved parental investments compensate for low birth weight. Controlling for family fixed effects, which encompass unobserved parental investment, we find birth weight positively correlates with math and reading scores and these estimates are considerably larger in magnitude than estimates derived from models that do not control for family fixed effects. Additionally, we examine how three specific parental investments ⎯ kindergarten entrance age, maternal labor supply, and family size ⎯ interact with birth weight in models of child test scores. Of these investments, only smaller family size conveys particular advantage to low birth weight children.