University of South Florida Scholar Commons Graduate Theses and Dissertations Graduate School 9-20-2018 Essays on Family-Friendly Policies, Child Planning and Children’s Early-Age Outcomes Stefani Milovanska-Farrington University of South Florida, [email protected] Follow this and additional works at: https://scholarcommons.usf.edu/etd Part of the Economics Commons Scholar Commons Citation Milovanska-Farrington, Stefani, "Essays on Family-Friendly Policies, Child Planning and Children’s Early- Age Outcomes" (2018). Graduate Theses and Dissertations. https://scholarcommons.usf.edu/etd/8129 This Dissertation is brought to you for free and open access by the Graduate School at Scholar Commons. It has been accepted for inclusion in Graduate Theses and Dissertations by an authorized administrator of Scholar Commons. For more information, please contact [email protected]. Essays on Family-Friendly Policies, Child Planning and Children’s Early-Age Outcomes by Stefani Milovanska-Farrington A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy Department of Economics College of Arts and Sciences University of South Florida Major Professor: Andrei Barbos, Ph. D. Padmaja Ayyagari, Ph.D. Joshua Wilde, Ph.D. James Cavendish, Ph.D. Date of Approval: October 25, 2018 Keywords: fertility, child development, family allowances, maternity leave Copyright © 2018, Stefani Milovanska-Farrington DEDICATION I dedicate this dissertation to some very important people in my life: To my parents and grandparents: Thank you for your unconditional love and encouragement; for being next to me when I succeed and when I fail; and for always being patient and supportive! To my loving husband: Thank you for your love and support; for being able to make me smile even when I want to cry; for reminding me what the most important things in life really are; and for putting up with me even when I am not as good of a wife as I would like to be! I love you and I always will! ACKNOWLEDGMENTS I would like to express my sincere gratitude to Dr. Barbos, my major professor, for his invaluable feedback, guidance and support during the process of writing the dissertation and all years I have spent at the University of South Florida. I also thank Dr. Ayyagari, Dr. Wilde and Dr. Cavendish for their comments and assistance, and for agreeing to be part of the Dissertation Committee. The helpful feedback from Dr. LaMattina is greatly appreciated as well. I am also grateful to all my professors at the University of South Florida who helped me to obtain the knowledge I need in order to successfully start my career path, and to the University of South Florida and the Office of Graduate Studies for awarding me a Presidential Fellowship without which my graduate studies would have not been possible. Finally, I am exceptionally grateful to my husband, parents and grandparents for their infinite love and support. TABLE OF CONTENTS LIST OF TABLES .......................................................................................................................... iv LIST OF FIGURES ......................................................................................................................... vi ABSTRACT .................................................................................................................................. vii CHAPTER 1: ARE PARENTS AND GRANDPARENTS SUBSTITUTES OR COMPLEMENTS? THE EFFECT OF PARENTAL AND GRANDPARENTAL SUPERVISION TIME INVESTMENT ON CHILDREN’S EARLY-AGE DEVELOPMENT 1. Introduction ...................................................................................................................... 2 2. Literature Review ............................................................................................................. 4 2.1. Literature on the Effect of Grandparenthood .................................................... 4 2.2. Literature on the Effect of Investing in Children on Their Outcomes .............. 5 2.3. Contribution ...................................................................................................... 7 3. Empirical Strategy and Identification .............................................................................. 8 3.1. Model Specification .......................................................................................... 9 3.2. Seemingly Unrelated Regressions ................................................................... 13 3.3. Validity of the Assumptions ............................................................................ 14 3.3.1. Assumptions Made for Identification of the Fixed Effects Regressions ......................................................................................... 14 3.3.2. Seemingly Unrelated Regressions Assumptions .............................. 15 4. Data ................................................................................................................................ 15 4.1. Variables .......................................................................................................... 15 4.2. Descriptive Statistics ....................................................................................... 18 5. Results ............................................................................................................................ 20 5.1. Main Results .................................................................................................... 20 5.2. Secondary Results ........................................................................................... 24 5.3. Diagnostic Tests and Validation of the Empirical Findings ........................... 26 5.4. Robustness Checks .......................................................................................... 26 6. Discussion ...................................................................................................................... 27 i 6.1. Possible Channels of the Effect of Intergenerational Transfers on Child Outcomes .................................................................................................................................... 27 6.2. Policy Implications .......................................................................................... 29 7. Conclusions .................................................................................................................... 31 References .......................................................................................................................... 34 Tables ................................................................................................................................. 39 Figures ................................................................................................................................ 46 CHAPTER 2: THE EFFECT OF FAMILY WELFARE SUPPORT ON THE LIKELIHOOD OF HAVING ANOTHER CHILD AND PARENTS’ LABOR SUPPLY 1. Introduction .................................................................................................................... 48 2. Literature Review ........................................................................................................... 50 2.1. Prior Literature on Child Benefits ................................................................... 50 2.2. Background Information ................................................................................. 53 3. Empirical Framework and Identification ....................................................................... 55 3.1. Model Specification ........................................................................................ 55 3.2. Two-Step Model Specification ........................................................................ 56 3.2.1. Identification Challenges .................................................................. 59 4. Data and Descriptive Statistics ....................................................................................... 60 4.1. Variables .......................................................................................................... 60 4.2. Summary Statistics .......................................................................................... 64 5. Results ............................................................................................................................ 65 5.1. Effects of Child Benefits On Fertility and Employment ................................. 65 5.2. Robustness Checks .......................................................................................... 66 6. Effect of a Universal Floor on Benefits.......................................................................... 68 6.1. Background Information ................................................................................. 68 6.2. Model Specification ........................................................................................ 69 6.3. Summary Statistics .......................................................................................... 71 6.4. Results and Validity of the Parallel Trends Assumption ................................ 71 7. Discussions ..................................................................................................................... 73 7.1. Potential Harvesting Effect ............................................................................. 73 7.2. Policy Implications .......................................................................................... 76