Maternal Investments in Children: The Role of Expected Effort and Returns

Inequalities in child developmental outcomes emerge early in life and persist. The family environment in general and parental investments in particular play a critical role in determining early differences and, thereby, the life trajectory of individuals. In a recent research project, MiSoC Co-Iā€™s Bhalotra and Delavande with MiSoC PhD student Font and co-author Maselko (University of North Carolina) provide unique evidence of the role that maternal depression can play in inhibiting child development. Across the world it is estimated that about 20% of women suffer perinatal depression, in the UK it is closer to 10%. They gathered primary data from a sample of about 1100 pregnant women in Pakistan, some of whom were diagnosed as clinically depressed and some of whom were not. They elicited their subjective perceptions of returns to and effort costs of the two main investments that mothers make in newborns- breastfeeding and structured play. They find significant heterogeneity in perceived costs and expected returns for outcomes in the cognitive, socio-emotional and health domains and demonstrate that these perceptions contribute to explaining heterogeneity in investments. In contrast they find no significant heterogeneity in preferences. Their key contribution is to elicit the perceived effort costs of making investments soon after birth, and to associate this with poverty, maternal depression, and parity, all of which predict fatigue. They simulate the impact of a series of alternative policy measures on investment choices, and their findings highlight the relevance of interventions designed to reduce perinatal stress alongside interventions that reduce informational frictions. More details on this project and its results are available from their working paper.