the influence of family importance on human capital accumulation

The Influence of Family The Influence of Family Importance on Human Capital Importance on Human Capital

AccumulationAccumulation

John Paolo R. RiveraRosanina A. Sayoc

Dustin Timothy D. Ang

School of EconomicsDe La Salle University

27 November 2012

Source: Alesina & Giuliano, (2010)

Strength of Family Ties Index

japan

china

Country Situationer

korea

The Family• Represents society in a micro-level

perspective determined by family relationships, behavior, incentives and expectations

• Affects multidimensional aspects of an individual

• Family ties exhibit stronger in other nations due to differences in history, culture and traditions

• Central force in shaping childhood outcomes Transmission of genetic attributes and

cultural values from parents to children

INTRODUCTION

To state a working definition for the term family tiesTo establish quantitative measure for the strength

of family ties using qualitative and behavioral responses from the World Values Survey (WVS)

To measure the likelihood of an individual attaining a level of education given his or her strength of family ties

Human Capital Accumulation• Family ties influence decisions on

investments in education Choice initially made by parents on behalf

of their children

Research Objectives

INTRODUCTION

Human Capital Theory views education as an investment where the costs and benefits are considered.

Demonstration effect illustrates the intergenerational decisions and influence of parents in shaping children’s preference, behavior and outcomes.

Socio-demographic factors include individual household characteristics such as the age, sex, marital status, employment status, income of the household head.

LITERATURE REVIEW

How do we go about this?

Qualitative Response Model (QRM) Ordered probit model Dependent variable is ordinal and

categorical in nature: level of educational attainment

World Values Survey (WVS) Qualitative household characteristics and

demographics Cross-section data from WVS Wave 1999-

2004 for 7 East Asian economies

How do we model this scenario?

Where

• EDUCAi is the level of educational attainment of the household given by 5 categorical outcomes

• STRFTi is a vector comprising of five different aspects of the family

• COUNTRYi is a vector of country dummies for selected East Asian economies

• Other social demographics to be explained further

Parameter Description

Level of Educational Attainment (EDUCAi )

COMEEi Completed elementary education

INCSEi Incomplete secondary education

COMSEi Complete secondary education

UNWODi University without degree

UNIWDi University with degree



Family Importance

VERYIMPORTANTi 1 if the household head regards the family as very important; 0 otherwise

RATHERIMPORTANTi

1 if the household head regards the family as rather important; 0 otherwise

Parental duties

RESPBESTi 1 if the household head believes that the parents’ duty is to do their best for their children even at the expense of their own well-being; 0 otherwise

RESPLIFEi 1 if the household head believes that parents have a life of their own and should not be asked to sacrifice their own well-being for the sake of their children; 0 otherwise



Respect and love parents

RESPECTALWAYSi 1 if household head believes that one must always love and respect parents regardless of their qualities and faults; 0 otherwise

RESPECTEARNEDi 1 if household head believes that one does not have the duty to respect and love parents who have not earned it by their behavior and attitudes; 0 otherwise

One of main goals in life has been to make my parents proud

PROUDSTRONGAi 1 if household head strongly agrees that a main goal in life is to make his/her parents proud; 0 otherwise

PROUDAi 1 if household head agrees that a main goal in life is to make his/her parents proud; 0 otherwise

More emphasis on family life

EMPHGOODi 1 if household head perceives more emphasis on family life as a good thing; 0 otherwise

EMPHBADi 1 if household head perceives more emphasis on family life as a bad thing; 0 otherwise



Country Dummies (CNTRYi )

INDOi, JAPNi , PRCH , RPHILi , SKORi ,

SINGi

1 if household resides in the respective East Asian economy; 0 otherwise. Base country is Viet Nam.

Marital Status (MARRIi )

MARRIEDi, DIVORCEDi,

SEPARATEDi, SINGLEi

1 if household head is either married, divorced, separated or single respectively; 0 otherwise

Employment Status (EMPLOi )

FULLTIMEi, PARTTIMEi, SELFEMPi,

HOUSEWIFEi, STUDENTi,

UNEMPi

1 if household head is employed as full time, part time, self-employed, housewife, student or unemployed respectively; 0 otherwise



Income Level Dummies (INCOMi )

LOWi, HIGHi

1 if household resides is categorized to earn low income or high income respectively; 0 otherwise

Other Soci0-Demographic Variables

AGEi Age of the household head

AGESQi Squared age of the household head

MALEHHHi 1 if household head is male; 0 otherwise

• Note: If all categories of dummy variables above assume a value of 0, then that is the base category


RESULTS AND DISCUSSION

Family Importance

Variable

Marginal Effects After Ordered Probit

Completed Elementary

Incomplete Secondary

Complete Secondary University without degree

University with degree

VERYIMPORTANTi -0.0104* -0.0077** 0.0080 0.0367* 0.0134*

RATHERIMPORTANTi

-0.0054 -0.0032 0.0045 0.0192 0.0066

INDOi -0.0056 -0.0034 0.0047 0.0202 0.0070

JAPNi -0.0154*** -0.0136* 0.0110*** 0.0540*** 0.0209***

PRCHi -0.0065** -0.0041 0.0054** 0.0232** 0.0081**

RPHLi -0.0145*** -0.0123 0.0105*** 0.0508*** 0.0194***

SKORi -0.0242*** -0.0268** 0.0147*** 0.0832*** 0.0357***

SINGi 0.0041 0.0011 -0.0040 -0.0151 -0.0047

AGEi 0.0000 0.0000 -0.0001 -0.0002 -0.0001

AGESQi 0.0000** 0.0000 0.0000 -0.0000** -0.0000*

MALEHHHi 0.0031 0.0010 -0.0030* -0.0115* -0.0036*

MARRIEDi 0.0005 0.0002 -0.0004 -0.0017 -0.0005

DIVORCEDi -0.0056 -0.0034 0.0047 0.0201 0.0069

SEPARATEDi -0.0019 -0.0009 0.0017 0.0069 0.0023

SINGLEi 0.0068* 0.0011 -0.0071* -0.0258* -0.0077

FULLTIMEi 0.0069*** 0.0011 -0.0072** -0.0259*** -0.0077**

PARTIMEi 0.0029 0.0009 -0.0028 -0.0107 -0.0033

SELFEMPi 0.0003 0.0001 -0.0003 -0.0010 -0.0003

RETIREDi -0.0121*** -0.0096 0.0091*** 0.0428*** 0.01589**

HOUSEWIFEi 0.0000 0.0000 -0.0000 -0.0001 -0.0000

STUDENTi 0.0180*** -0.0087 -0.0239*** -0.0738*** -0.0191***

UNEMPi 0.0044 0.0011 -0.0044 -0.0164 -0.0050

LOWi 0.0000 0.0000 -0.0000 -0.0001 -0.0000

HIGHi -0.0035 -0.0019 0.0030 0.0126 0.0042

Predicted Probability

0.0966 0.3392 0.1162 0.2105 0.0348

*** Significant at the 1%** Significant at the 5%* Significant at the 10%

Parental Duties

Variable






RESPBESTi -0.0038 -0.0034 0.0028 0.0136 0.0052

RESPLIFEi 0.0025 0.0017 -0.0020 -0.0089 -0.0032

INDOi -0.0075* -0.0074 0.0050* 0.0261* 0.0104*

JAPNi -0.0186*** -0.0233*** 0.0100*** 0.0632*** 0.0288***

PRCHi -0.0059** -0.0055 0.0041** 0.0206** 0.0080**

RPHLi -0.0163*** -0.0195** 0.0092*** 0.0554*** 0.0245***

SKORi -0.0034*** -0.0362*** 0.0117*** 0.0857*** 0.0424***

SINGi 0.0000 0.0022 -0.0027 -0.0120 -0.0042

AGEi 0.0000 0.0000 -0.0000 -0.0001 -0.0000

AGESQi 0.0033** 0.0000 -0.0000** -0.0000** -0.0000**

MALEHHHi 0.0004* 0.0022 -0.0026* -0.0116* -0.0041*

MARRIEDi -0.0055 0.0003 -0.0003 -0.0013 -0.0005

DIVORCEDi -0.0018 -0.0051 0.0038 0.0192 0.0075

SEPARATEDi 0.0073 -0.0015 0.0013 0.0064 0.0024

SINGLEi 0.0073* 0.0039 -0.0063* -0.0264* -0.0089

FULLTIMEi 0.0075*** 0.0040 -0.0065** -0.0270*** -0.0091**

PARTIMEi 0.0032 0.0022 -0.0026 -0.0114 -0.0040

SELFEMPi 0.0003 0.0002 -0.0002 -0.0010*** -0.0004

RETIREDi -0.0129*** -0.0143* 0.0078*** 0.0441 0.0187**

HOUSEWIFEi 0.0001 0.0000 -0.0000 -0.0002 -0.0001

STUDENTi 0.0200*** -0.0001 -0.02223*** -0.0773*** -0.0224***

UNEMPi 0.0048 0.0030 -0.0040 -0.0173 -0.0060

LOWi 0.0001 0.0001 -0.0001 -0.0004 -0.0002

HIGHi -0.0037 -0.0032 0.0026 0.0129 0.0049

Predicted Probability 0.0911 0.3359 0.1208 0.2302 0.0416


Respect and love parents

Variable






RESPECTALWAYSi-0.0045 -0.0040 0.0033 0.0159 0.0061

RESPECTEARNEDi-0.0042 -0.0036 0.0030 0.0147 0.0056

INDOi-0.0072* -0.0068 0.0049* 0.0252* 0.0099*

JAPNi-0.0179*** -0.0217*** 0.0099*** 0.0608*** 0.0271***

PRCHi-0.0058** -0.0053* 0.0041** 0.0204** 0.0079**

RPHLi-0.0156*** -0.0181*** 0.0091*** 0.0534*** 0.0232***

SKORi-0.0250*** -0.0345*** 0.0118*** 0.0839*** 0.0408***

SINGi0.0037 0.0023 -0.0031 -0.0133 -0.0046

AGEi0.0000 0.0000 -0.0000 -0.0002 -0.0001

AGESQi0.0000** 0.0000 -0.0000*** -0.0000* -0.0000**

MALEHHHi0.0033* 0.0021 -0.0037* -0.0117* -0.0041*

MARRIEDi0.0002 0.0001 -0.002 -0.0007 -0.0003

DIVORCEDi-0.0056 -0.0051 0.0040 0.0197 0.0076

SEPARATEDi-0.0018 -0.0014 0.0013 0.0063 0.0023

SINGLEi0.0074* 0.0037 -0.0065* -0.0267* -0.0089*

FULLTIMEi0.0075*** 0.0038 -0.0066** -0.0271*** -0.0091***

PARTIMEi0.0033 0.0021 -0.0027 -0.0118 -0.0041

SELFEMPi0.0004 0.0003 -0.0003 -0.0014 -0.0005

RETIREDi-0.0126*** -0.0136** 0.0078*** 0.0432*** 0.0181**

HOUSEWIFEi0.0001 0.0001 -0.0001 -0.0003 -0.0001

STUDENTi0.0199*** -0.0008 -0.0225*** -0.0770*** -0.0222***

UNEMPi0.0049 0.0029 -0.0042 -0.0177 -0.0061

LOWi0.0001 0.0001 -0.0001 -0.0004 -0.0002

HIGHi-0.0036 -0.0030 0.0026 0.0126 0.0048



One of main goals has been to make parents proud

Variable






PROUDSTRONGAi-0.0009 -0.0009 0.0006 0.0032 0.0013

PROUDAi-0.0002 -0.0017 0.0001 0.0006 0.0002

INDOi-0.0071 -0.0081 0.0042 0.0143 0.0104

JAPNi-0.0169*** -0.0233*** 0.0081*** 0.0570*** 0.0283***

PRCHi-0.0059** -0.0065* 0.0036** 0.0203** 0.0085*

RPHLi-0.0159*** -0.0215*** 0.0078*** 0.0546*** 0.0254***

SKORi-0.0254*** -0.0400*** 0.0097*** 0.0843*** 0.0450***

SINGi0.0036 0.0031 -0.0027 -0.0128 -0.0048

AGEi0.0000 0.0000 -0.0000 -0.0001 -0.0001

AGESQi0.0000** 0.0000** -0.0000** -0.0000** -0.0000**

MALEHHHi0.0034* 0.0029* -0.0024* -0.0118* -0.0045*

MARRIEDi0.0002 0.0002 -0.0002 -0.0008 -0.0003

DIVORCEDi-0.0059 -0.0065 0.0036 0.0201 0.0084

SEPARATEDi-0.0016 -0.0016 0.0011 0.0056 0.0022

SINGLEi0.0078* 0.0056 -0.0061* -0.0275* -0.0100*

FULLTIMEi0.0076*** 0.0056** -0.0060** -0.0270*** -0.0098***

PARTIMEi0.0034 0.0029 -0.0024 -0.0118 -0.0045

SELFEMPi0.0003 0.0003 -0.0002 -0.0010 -0.0004

RETIREDi-0.0130*** -0.0166** 0.0068*** 0.0439*** 0.0201***

HOUSEWIFEi-0.0001 -0.0001 0.0000 0.0002 0.0001

STUDENTi0.0209*** 0.0049 -0.0210*** -0.0782*** -0.0243***

UNEMPi0.0050 0.0040 -0.0037 -0.0185 -0.0065

LOWi0.0001 0.0001 -0.0001 -0.0003 -0.0001

HIGHi-0.0037 -0.0039 0.0023* 0.0127 0.0052



More emphasis on family life

Variable






EMPHGOODi-0.0072*** -0.0059** 0.0053** 0.0252*** 0.0095***

EMPHBADi0.0048 -0.0036 0.0038 0.0169 0.0062

INDOi-0.0070 -0.0058 0.0052 0.0246 0.0092

JAPNi-0.0164*** -0.0185*** 0.0102*** 0.0563*** 0.0235***

PRCHi-0.0055** -0.0043 0.0042** 0.0193** 0.0071*

RPHLi-0.154*** -0.0161*** 0.0098*** 0.0533*** 0.0220***

SKORi-0.0246*** -0.0323*** 0.0130*** 0.0835*** 0.0384***

SINGi0.0039 0.0019 -0.0035 -0.0141 -0.0047

AGEi0.0001 0.0000 -0.0001 -0.0002 -0.0001

AGESQi0.0000** 0.0000 -0.0000*** -0.0000* -0.0000*

MALEHHHi0.0031* 0.0016 -0.0028* -0.0114* -0.0038*

MARRIEDi0.0003 0.0002 -0.0002 -0.0010 -0.0003

DIVORCEDi-0.0057 -0.0045 0.0043 0.0201 0.0074

SEPARATEDi-0.0019 -0.0013 0.0015 0.0066 0.0023

SINGLEi0.0073* 0.0028 -0.0069* -0.0269* -0.0086*

FULLTIMEi0.0073*** 0.0028 -0.0069** -0.0268*** -0.0085***

PARTIMEi0.0033 0.0018 -0.0029 -0.0120 -0.0040

SELFEMPi0.0004 0.0003 -0.0004 -0.0015 -0.0005

RETIREDi-0.0123*** -0.0118* 0.0083*** 0.0426*** 0.0169**

HOUSEWIFEi0.0001 0.0001 -0.0001 -0.0003 -0.0001

STUDENTi0.0190*** -0.0039 -0.0229*** -0.0752*** -0.0207***

UNEMPi0.0048 0.0022 -0.0042 -0.0172 -0.0056

LOWi-0.0001 -0.0001 0.0001 0.0004 0.0001

HIGHi-0.0036 -0.0026 0.0029* 0.0129* 0.0047



What are our findings?• Only two out

of five definitions of family ties influence level of educational attainment

• Consistency in current and future perceptions evidence demonstration effect

• Prestige and value for the family translates to self

• Overall impact exhibits larger influence

• Explains constraint of socio-economic characteristics

• Age, sex and income levels are consistent with literature

• Variables not captured by the model that are country specific may be at work

What can we conclude?

CONCLUSION• We were able to contribute an empirical

definition of family ties by utilizing significant aspects Family importance and more emphasis on

family life comprise the definition Evident of the demonstration effect Valuing the family translates to valuing the

self• Two out of five aspects of family ties

influence the likelihood of individuals to obtain a certain educational attainment Widespread insignificant estimates despite

distinctions in location and levels of education for other three

CONCLUSION• Certain socio-demographic variables hold

an even more significant weight Generally consistent with literature Effectively captures true financial and

economic capacity to invest in education Inconsistencies

- In marital status due to prioritizing other self-interests

- In employment status due to work and study trade-off

In relation, family support can ease financial problems and shoulder costs of higher education

• Overall, five sub-definitions of family ties converge to a general result for the seven East Asian economies Demographics matter more which are

attuned to country specific factors There is no one definition that is all-

encompassing• Country dummies indicate varying capacities

of East Asian economies to achieve higher educational attainment Unobserved heterogeneity ascribed to

different standards, facilitation and provision for education

CONCLUSION

Each economy can define family ties differently based on norms

Achieving higher educational attainment can be facilitated by economic, behavioral or psychological factors

CONCLUSION

The Influence of Family The Influence of Family Importance on Human Capital Importance on Human Capital

AccumulationAccumulation

John Paolo R. RiveraRosanina A. Sayoc

Dustin Timothy D. Ang

School of EconomicsDe La Salle University

20 October 2012

the influence of family importance on human capital accumulation

Documents

household head

family relationships

influence of family

influence of parents

term family tiesto

parents duty

individualfamily ties

qualitative response