The paper I choose is “How Does Household Income Affect Child Personality Traits and Behaviors?” in the American Economic Review. The main research question is how does the unconditional household income transfer affect child emotional and behavior health and personality traits.
In order to figure out this research question, the authors mainly use the dataset Great Smoky Mountains Study (GSMS) which “covers a representative sample of children from 11 countries in North Carolina” (Akee et al., 2018, p.775). By analyzing the data, the authors focus on the changes at the household level “before and after the introduction of the unconditional cash transfers” and compare “those who receive them to households that never received the transfers” (Akee et al., 2018, p.776). Based on these data, the authors come to the conclusion that the increase in unconditional household income improves child personality, traits, emotional well-being and behavioral health.
In the process of investigating the mechanism behind the observed effects, the authors mainly implement the quasi-experimental income intervention. They investigate effect of the Eastern Cherokee tribal government’s revenue distribution policy. The Eastern Cherokee tribal government distributes a portion of the profits based on tribal enrollment status only. So this can be regarded as unconditional transfer to some extent. Then they analyze this mechanism from three dimensions: conscientiousness, agreeableness and neuroticism. In order to further identify the effects of exogenous income shock on child well-being, the authors initially confirm that “there is a strong positive relationship between initial household income and initial personality skill endowment across both racial groups” by analyzing the data in the pre-intervention period. Furthermore, the authors directly test whether extra income results in changes in parental behaviors or household characteristics that may play a role in explaining the observed child improvement.
In the empirical analysis part, the authors adopt an innovative methodology based on a triple difference regression specification using all available data and all possible sources of variation in the data. Based on the empirical analysis result, the authors find that unconditional household income transfer is beneficial to children’s emotional and behavioral health and personality traits. Besides, the income intervention also results in improvements in parental relationships which is a potential mechanism behind these observed effects.
This paper completes an excellent empirical analysis to investigate the potential mechanism. They take many factors into consideration such as age and race. From my own perspective, a potential extension here is the initial household income. Because wealth has a cumulative effect, a rich household may be indifferent to the unconditional income transfer and thus this income intervention may not have effects on the children in this rich family. So I think a missing variable that may be valuable here is the initial household wealth. This also can be confirmed based on the data in the pre-intervention period. We can find tat there is a strong positive relationship between initial household wealth and initial personality skill endowment across both racial groups. Because a lower household income may cause a lower investment in child skills. Thus it is possible that children from households with lower income would exhibit greater human capital gains from the unconditional household income transfer if the marginal effect is decreasing.
In terms of methodology, I think the triple difference regression specification suits this empirical analysis very well. For the data, I may choose more wider data not only limited in the specific race. For instance, I may analysis the Minimum Guarantee policy of China and other government’s transfer payment policies because these policies also can be regarded as unconditional income transfers to some extent.
Reference:
Akee, Randall, et al. “How does household income affect child personality traits and behaviors?” American Economic Review, 108.3 (2018): 775-827.
MA Proposal Workshop: Session 1
Ying Sun
The paper I choose is “How Does Household Income Affect Child Personality Traits and Behaviors?” in the American Economic Review. The main research question is how does the unconditional household income transfer affect child emotional and behavior health and personality traits.
In order to figure out this research question, the authors mainly use the dataset Great Smoky Mountains Study (GSMS) which “covers a representative sample of children from 11 countries in North Carolina” (Akee et al., 2018, p.775). By analyzing the data, the authors focus on the changes at the household level “before and after the introduction of the unconditional cash transfers” and compare “those who receive them to households that never received the transfers” (Akee et al., 2018, p.776). Based on these data, the authors come to the conclusion that the increase in unconditional household income improves child personality, traits, emotional well-being and behavioral health.
In the process of investigating the mechanism behind the observed effects, the authors mainly implement the quasi-experimental income intervention. They investigate effect of the Eastern Cherokee tribal government’s revenue distribution policy. The Eastern Cherokee tribal government distributes a portion of the profits based on tribal enrollment status only. So this can be regarded as unconditional transfer to some extent. Then they analyze this mechanism from three dimensions: conscientiousness, agreeableness and neuroticism. In order to further identify the effects of exogenous income shock on child well-being, the authors initially confirm that “there is a strong positive relationship between initial household income and initial personality skill endowment across both racial groups” by analyzing the data in the pre-intervention period. Furthermore, the authors directly test whether extra income results in changes in parental behaviors or household characteristics that may play a role in explaining the observed child improvement.
In the empirical analysis part, the authors adopt an innovative methodology based on a triple difference regression specification using all available data and all possible sources of variation in the data. Based on the empirical analysis result, the authors find that unconditional household income transfer is beneficial to children’s emotional and behavioral health and personality traits. Besides, the income intervention also results in improvements in parental relationships which is a potential mechanism behind these observed effects.
This paper completes an excellent empirical analysis to investigate the potential mechanism. They take many factors into consideration such as age and race. From my own perspective, a potential extension here is the initial household income. Because wealth has a cumulative effect, a rich household may be indifferent to the unconditional income transfer and thus this income intervention may not have effects on the children in this rich family. So I think a missing variable that may be valuable here is the initial household wealth. This also can be confirmed based on the data in the pre-intervention period. We can find tat there is a strong positive relationship between initial household wealth and initial personality skill endowment across both racial groups. Because a lower household income may cause a lower investment in child skills. Thus it is possible that children from households with lower income would exhibit greater human capital gains from the unconditional household income transfer if the marginal effect is decreasing.
In terms of methodology, I think the triple difference regression specification suits this empirical analysis very well. For the data, I may choose more wider data not only limited in the specific race. For instance, I may analysis the Minimum Guarantee policy of China and other government’s transfer payment policies because these policies also can be regarded as unconditional income transfers to some extent.
Reference: Akee, Randall, et al. “How does household income affect child personality traits and behaviors?” American Economic Review, 108.3 (2018): 775-827.