In general, economic models of human development assume that mothers have rational expectations about the technology of skill formation, that is, about the process that determines how their offspring develop skills in socio-emotional and cognitive domains. This assumption implies that all women -- regardless of their race, education, or socio-economic status -- have the correct information regarding how investments affect the development of their children. When such models are structurally estimated, the variation in observed investments across families is attributed to shocks heterogeneity in the characteristics of the children or families, but not to the heterogenety in the knowledge base of the mother. The goals of our research are to test whether this assumption is accurate~ to formulate an economic model of human development that allows for the heterogeneity in maternal beliefs to play a role in the maternal choices of investments~ and to evaluate the importance of such heterogeneity in the determination of child development and the welfare of the families. To execute this task, we will collect longitudinal data on 960 nulliparous women in three rounds. The women will be divided into six cells according to their race (white and black) and schooling level (less than high school or GED, exactly high school, more than high school). In the first survey round, conducted in the 2nd trimester of pregnancy, we will ask the women about their beliefs regarding the impact of investments on child development. The second survey round, conducted at approximately 6 months post- delivery, will collect data on investment choices made by the mother and her perception of father involvement. Finally, in the third round of data collection, conducted when the child is approximately 24 months old, we will ask the mother about the child's developmental milestones using instruments developed for Children of the National Longitudinal Survey of Youth 1979 (CNLSY/79), and assess the children with the Bayley Short Form-Research Edition (BSF-R) used in the Early Childhood Longitudinal Study - Birth Cohort (ECLS-B), and re-interview the mothers about their beliefs. In addition to primary data collection we wil analyze the child development data from the CNLSY/79 and ECLS-B. We will use these data to obtain objective estimate of the technology of skill formation. Using the data collected as part of this proposal, we will be able to obtain the maternal subjective beliefs about the technology of skill formation. By comparing the objective estimates with subjective beliefs, we will be able to determine the accuracy of maternal beliefs by schooling and race cells. Because we will have data on investments in the 2nd survey round, we will be able to investigate whether the beliefs are correlated with investment choices made by women. From the 3rd round, we will be able to see if mothers'subjective beliefs change as a result of their observation of their children's development.
If maternal beliefs about the impact of investments on child development vary by maternal racial background or schooling, then current economic models of human capital formation are potentially misleading because they rely on the assumption that such heterogeneity in maternal knowledge does not exist. Our study will generate new insights about maternal beliefs that can help guide public policies and interventions designed to reduce disparities in child development and identify population subgroups that could benefit from such interventions.