The Economics of Parenting, Self-esteem and Academic PerformanceTheory and a Test

This paper develops a theory about how signals sent to a child by an altruistic parent affect the child's self-esteem, effort and long-term performance when the parent has better information about child ability than the child doesWe carry out OLS, 2SLS and 3SLS estimations of our model on a sample of 651 college studentsOur results show that some complementary actions before college, such as parental praise, foster academic achievement above what natural ability would predictConversely, we find that some substitutionary actions before college, e.gproviding cars as gifts, are associated with lower effort in college and underachievement