School of Economics and Finance

No. 794: Locus of Control and Its Intergenerational Implications for Early Childhood Skill Formation

Warn N. Lekfuangfu , Chulalongkorn University and CEP, London School of Economics
Nattavudh Powdthavee , CEP, London School of Economics
Nele Warrinnier , CEP, London School of Economics and University of Leuven
Francesca Cornaglia , Queen Mary University of London and CEP, London School of Economics

May 2, 2016

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This paper builds upon Cunha's (2015) subjective rationality model in which parents have a subjective belief about the impact of their investment on the early skill formation of their children. We propose that this subjective belief is determined in part by locus of control (LOC), i.e., the extent to which individuals believe that their actions can influence future outcomes. Consistent with the theory, we show that maternal LOC measured at the 12th week of gestation strongly predicts maternal attitudes towards parenting style, maternal time investments, as well as early and late cognitive outcomes. We also utilize the variation in inputs and outputs by maternal LOC to help improve the specification typically used in the estimation of skill production function parameters.

J.E.L classification codes: J01, I31

Keywords:Locus of control, Parental investment, Human capital accumulation, Early skill formation, ALSPAC