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The Economics of Parenting with Neighborhood and Peer Effects

EUI Economics Lecture

Add to calendar 2023-02-16 11:00 2023-02-16 12:15 Europe/Rome The Economics of Parenting with Neighborhood and Peer Effects Conference Room Villa La Fonte YYYY-MM-DD


16 February 2023

11:00 - 12:15 CET


Conference Room

Villa La Fonte

In this lecture, Matthias Doepke (LSE), will present his paper "The Economics of Parenting with Neighborhood and Peer Effects".

As children reach adolescence, peer interactions become increasingly central to their development, whereas the direct influence of parents wanes. Nevertheless, parents can continue to exert leverage by shaping their children's peer groups. We study interactions of parenting style and peer effects in a model where children's skill accumulation depends on both parental inputs and peers, and where parents can affect the peer group by restricting who their children can interact with. We estimate the model and show that it can capture empirical patterns regarding the interaction of peer characteristics, parental behavior, and skill accumulation among US high school students. We use the estimated model for policy simulations. We find that interventions that move children to a more favorable neighborhood have large effects but lose impact when they are scaled up because parents' equilibrium responses push against successful integration with the new peer group. We suggest complementary policies that can sustain the effect of scaled-up policies.

Co-authors: Francesco Agostinelli, Giuseppe Sorrenti, and Fabrizio Zilibotti.

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