Parental actions and sibling inequality.


Momi Dahan and Alejandro Gaviria. 2003. “Parental actions and sibling inequality.” Journal of Development Economics, 72, Pp. 281 - 297.


This paper presents a simple model of resource allocation within the family. The model is based on two main assumptions: there are nonconvexities in human capital investments and parents cannot borrow to finance their children's education. The model shows that poor and middle-income parents will often find it optimal to channel human capital investments into a few of their children, thus creating sizable inequalities among siblings. The paper shows that the predictions of the model are consistent with the available evidence for three Latin American countries.