Electronic Thesis and Dissertation Repository

Thesis Format

Integrated Article

Degree

Doctor of Philosophy

Program

Economics

Supervisor

Lance Lochner

2nd Supervisor

Audra Bowlus

Joint Supervisor

3rd Supervisor

Sergio Ocampo Díaz

Co-Supervisor

Abstract

This thesis contains three chapters exploring skill accumulation in children and its valuation in adult workers. In Chapter 2, I leverage novel data available in the Longitudinal Study of Australian Children (LSAC) to show that early childhood education teachers' perceptions about non-cognitive (socio-emotional) delays in young children are not only influenced by children's own development, but also by the average level of development of other children in the neighbourhood. My research suggests a cascading effect of teachers' perceptions on maternal perceptions, and home and school environments. In Chapter 3 I investigate the expansion of female-favourable gaps in literacy in school-aged children, focusing on the role of time investment by mothers. I augment a household production and child skill accumulation model developed by Del Boca, Flinn, and Wiswall (2014) to account for gender-specific differences in the literacy production process, initial endowments, and parental preferences, and estimate it using the LSAC data. My findings suggest that the role of time investments by mothers in the expansion of literacy gender gaps may be limited, and these gaps are driven by other productivity differences. In Chapter 4 I focus on the human capital of adult workers and explore changes in returns to skills and quantities of human capital for workers in broad occupational groups specializing in abstract, manual, and routine tasks. I estimate the evolution of returns to occupation-specific human capital using the flat spot price identification method, which accommodates cohort quality changes over time. My findings are consistent with the skill-biased technical change explanation for the wage polarization in the U.S. between 1970 and 2022. Growing inequality at the top of the wage distribution is driven by the rise in the price of abstract relative to manual and routine human capital, while an increase in the quantity of manual relative to routine human capital drives the declining inequality at the bottom of the wage distribution.

Summary for Lay Audience

This thesis explores how children learn in early childhood and during school age, as well as how adult workers' skills are valued in the labour market. In Chapter 2, I study teacher's beliefs about socio-emotional and cognitive developmental delays in preschool-aged children. I show that perceptions of teachers are not only influenced by a child's own level of development, but they also depend on the teacher's reference group, represented by the level of development of other children in the neighbourhood. My findings imply that teachers may be less likely to recognize delays in children, if delays are more prevalent in the neighbourhood. I then show that misperceptions by teachers have important implications. For example, teachers' perceptions affect how mothers view their children, and potentially determine the home and school environments of children, such as the uptake of therapy, the uptake of parenting support resources, and whether parents expect their children to attend college in the future. In Chapter 3 I study why girls' advantage in literacy over boys increases during school years. Specifically, I focus on the role of time that mothers spend with their children. My findings indicate that differences in how much time mothers spend with school-aged children of different genders have limited power to explain the growing gender gaps in literacy. In Chapter 4 I explore changes in productivity for adult workers in broad occupational groups specializing in abstract, manual, and routine tasks. I estimate these changes using a method which allows different cohorts of workers to have different quantities of skills. For example, a manager born and educated in the 1950s can have a different quantity of skills compared to the millennial manager born and educated in the 1990s. My findings explain changing wage inequality in the U.S. between 1970 and 2022 as a combination of different factors. On the one hand, wage inequality among high earners has increased because the market increasingly values abstract tasks. On the other hand, wage inequality decreased among low earners because workers in manual occupations became more skilled relative to workers in routine occupations. My findings are consistent with the technical change increasing workers' productivity in abstract occupations.

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