This paper examines the effects of early skill advantages on parental beliefs, investments, and children’s educational outcomes measured up to age 27. We exploit exogenous variation in skills due to school entry rules, combining 20 years of Chilean administrative records with a regression discontinuity design. Our results show that these rules change parental beliefs and influence their material investments. Children benefited from the early skill advantage have higher in-school performance and college entrance scores, and sizable effects on college attendance and enrollment at selective institutions. These long-run effects are more pronounced for low-income families, and likely mediated by parental beliefs and investments.
Second version, May 2022
I21: Analysis of Education
I26: Returns to Education
I28: Education: Government Policy
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
J31: Wage Level and Structure; Wage Differentials