How much do parents care about investing equally in their kids?

Mar 05, 2021

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Narrator: Few parents doubt the love they have for their kids. They work hard to pay for housing, food, and other needs to make sure their children are taken care of in every sense of the word. That said, when parents have multiple children, do they play favorites, either knowingly or unknowingly? Chicago Booth’s Rebecca Dizon-Ross and her coauthors set up an experiment to find that out in the context of how parents invest in their children’s education.

Rebecca Dizon-Ross: We were interested in understanding how much do parents care about equality between their kids, and if they care about equality, what type of equality do they care about? Do they want to bring their kids to the same level? So invest more in their kid who might be not doing quite as well? Or do they care about investing equally in both children and feel bad if they treat their kids unequally? Those were the basic motivating questions. Previous literature in economics had talked about the desire to maximize returns, or treat it as a financial investment, and the desire to bring both kids to the same level, but had never talked about parents’ desire to treat their kids equally. Well, when I talk to parents, I see a lot of parents talking about wanting to treat their kids equally. So going in, we thought that might be a big force affecting parents’ investments that hadn’t yet been documented. So that’s what we were really interested in testing: Is that a big thing? And it turned out it was.

Narrator: The researchers conducted their study in a rural area of Malawi, in part because they wanted to stretch their research budget and simulate a high-stakes decision.

Rebecca Dizon-Ross: In the real world, stakes are high. Like, if parents are investing equally in their kids, instead of sending one kid farther in school, they’re giving up a lot of money. And so, we wanted for our experiment to be able to give parents a lot of money, and so that they’d have to give up a lot of money to equalize. And so that was much more feasible in Malawi, where a dollar goes a long way than in, say, the US, where it would have been much more expensive.

Narrator: The researchers sampled parents who had two kids enrolled in school. They told the parents they were going to give each child a test and then pay each child a reward, the size of which would depend on the test result. The better a kid did on the test, the higher the reward. But researchers also offered tutoring for one child per family to be picked using lottery tickets. Before the test was administered, each parent received 10 lottery tickets, which they could split however they desired between their kids. One of those tickets, randomly selected, would be worth an hour of tutoring.

Rebecca Dizon-Ross: If they wanted for sure one of their kids to get tutoring, they just give all the lottery tickets to that kid. If they wanted the other kid to get tutoring, they’d give them all the lottery tickets. Or if they wanted both kids to have a shot, they would split it between. And so, this allowed us to see: How do parents split these tickets? It allowed us to basically see: What are their objectives in investing? And so, what we see is that most of the parents split their tickets 50/50 between their kids. And so that suggests that they really do care about equality because in this setup, if they didn’t care about equality, since only one child is actually getting the tutoring, they should just give the tickets to whichever child they want to get the tutoring. They should only ever split it if they just feel really badly choosing between their children— if they feel really badly, like, investing unequally in their kids.

Narrator: The researchers randomized the way they paid the kids. Think of the benchmark as being that both children would be paid $1 for every point each child earned on the test. For some families, the researchers randomly increased how much they would pay just one of the children. So one of the kids would still get $1 per point, but the other kid might get, say, $10 per point.

Rebecca Dizon-Ross: So if parents care about returns or care about maximizing total earnings, they should for sure give the tutoring to the kid who’s getting more money per point on the test because that’s a better investment in that point. However, if they care about, instead, the kid who is only getting 1 point per test is now much poorer than their sibling. So if instead what they care about is kind of bringing their kids to earn equal earnings, they should give the tutoring to the one who has lower earnings per tests.

Narrator: The researchers observed that some parents tried to maximize their children’s earnings overall. They also saw some parents trying to equalize the amount they gave their children by giving them equal numbers of lottery tickets. What they didn’t see is parents spending more on the child with the lower projected earnings to equalize the children’s ultimate earnings.

Rebecca Dizon-Ross: And so when we asked parents about this, it seemed to be just that they thought, "If one kid’s doing better and has higher earnings, that’s sort of fair." So they think of it as being fair if one child has higher outcomes because they have higher ability or ‘cause they’re putting in more effort. And so that’s something actually we see in a lot of contexts, that people think inequality is based on effort or inequality is based on ability, or sort of fair. Whereas inequality is based on some other things like randomness or not. So that seems to be something that parents believe as well. And I was kind of surprised. I thought that they would care more about equating their children’s actual outcomes. And they didn’t.

Narrator: The research raises the possibility that parents may forego opportunities for one child if those opportunities would create inequalities between their kids.

Rebecca Dizon-Ross: So imagine a parent who has been offered a secondary-school scholarship for just one of their children and they can’t afford it for the other. Our estimates suggest that that parent might just give up the scholarship entirely. So basically, hurt one of their children because it would create an inequality between their children. So that’s something that we want to look out further, in further work, is to see: Are parents actually sacrificing important opportunities because taking up those opportunities would create inequalities that they’re uncomfortable with?