This continuation project will investigate the allocation of resources among children within families and the effects of differences in resources on child development and on subsequent adult socioeconomic success, examining both differences within families and differences across families. The project involves a combination of theoretical econometric, and empirical components that make it possible to draw appropriate inferences despite data limitations that may have caused biases in previous studies. It will utilize nine data sets, most of which have not been exploited before for the proposed types of analyses: the Children of the NLSY sample on child development and child outcomes, the Fels sample on child development and adult outcomes, the IPC-based international data set, ICRISAT data on households in rural south India, the modified Michigan Panel Study on Income Dynamics with intergenerational matches, the NASNRC Twin and Adult Offspring Sample with intergenerational matches, the PHEAA data on higher educational choices of Pennsylvanian residents, the Rand Malaysian Family Life Survey-2, and the Reed and Reed intergenerational sample. The major components of the project will be: (1) the extension of studies of intrafamilial allocation of resources among children to include a wider range of outcomes (e.g., indicators of psychological, social and physical development) and inputs using the Fels, Children of NLSY, and Reed and Reed data; (2) the development and estimation of an empirically tractable bargaining model for intrahousehold allocation, with specific empirical application to the distribution of nutrients among household members in rural south India; (3) the development and estimation of an empirically tractable closed-form model for the determination of the number of surviving children with both habit formation in preferences and relative price responses, with estimation using the IPC-based international data set; (4) examination of the role of nature versus nurture in the decomposition of the variance in child development and subsequent adult success for a number of phenotypes with a latent variable representation of environment and with empirical estimates for five data sets; and (5) extension of estimates of Becker's Woytinsky Lecture Model of the demand for and the supply of children with new samples (e.g., Fels, PHEAA) that include a broader representation of endowments and better price data (dependent on individual and family characteristics through loan and fellowship programs).
