The importance of parental beliefs in parental investment decisions

The amount of time and financial resources which parents allocate towards their children varies considerably across families. Differences in available resources might explain a substantial part of this variation. However, parents’ beliefs about these investments are also likely to play a crucial role in their decisions. This raises several important questions:

• How do parents perceive the returns to different types of investments (i.e. time investments, material investments and school quality)? Do they perceive different investments as complementing each other, or acting as a suitable substitute for other ones?
• To what extent do parents’ beliefs differ? In particular, do they differ systematically across socio-economic groups? Are differences in perceived returns predictive of actual investment decisions?
• To what extent do parents differ in their beliefs about their own ability to help their children acquire new skills? How do those beliefs differ across socio-economic groups?

The researchers will address these questions by surveying a representative sample of 2,000 parents in England, using hypothetical investment scenarios.

The project aims to shed light on which parental interventions are likely to be most effective in promoting parental investments and child outcomes, especially among socio-economically disadvantaged groups.