Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171935
Authors: 
Deckers, Thomas
Falk, Armin
Kosse, Fabian
Pinger, Pia
Schildberg-Hörisch, Hannah
Year of Publication: 
2017
Series/Report no.: 
DICE Discussion Paper No. 274
Abstract: 
This paper explores inequalities in IQ and economic preferences between children from high and low socio-economic status (SES) families. We document that children from high SES families are more intelligent, patient and altruistic, as well as less likely to be risk-seeking. To understand the underlying causes and mechanisms, we propose a framework of how parental investments as well as maternal IQ and economic preferences influence a child's IQ and preferences. Within this framework, we allow SES to influence both the level of parental time and parenting style investments, as well as the productivity of the investment process. Our results indicate that disparities in the level of parental investments hold substantial importance for SES gaps in economic preferences and, to a lesser extent, IQ. The systematic variations in IQ and preferences by SES might offer an explanation for socio-economic disparities in economic decision-making and social immobility.
Subjects: 
socio-economic status
time preferences
risk preferences
altruism
experiments with children
origins of preferences
human capital
JEL: 
C90
D64
D90
D81
J13
J24
J62
ISBN: 
978-3-86304-273-8
Document Type: 
Working Paper

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