Parental Beliefs about Returns to Different Types of Investments in School Children

ABSTRACT

Using a representative sample of 1,962 parents in England, we study how parents perceive the returns to parental time investments, material investments, and school quality. Parents perceive the returns to three hours of weekly time investments or £30 of weekly material investments to matter more than moving a child to a better school. Material investments are perceived as more productive if children attend higher-quality schools. Perceived returns do not differ with the child’s initial human capital or gender, and they are highly correlated with actual investment decisions.