Parental Risk Attitudes and Children's Academic Test Scores: Evidence from the <scp>US P</scp>anel <scp>S</scp>tudy of <scp>I</scp>ncome <scp>D</scp>ynamics

Abstract

Using a sequence of questions from the 1996 US Panel Study of Income Dynamics (PSID), we explore the implications of interpersonal differences in parent's attitudes towards risk for the academic test scores of their children focusing on information drawn from the 1997 Child Development Supplement of the PSID. In addition, we explore whether parental risk preference influences whether the child subsequently attends college. Our findings suggest that a parent's degree of risk aversion is inversely related to the academic test scores of their children as well as being inversely related to the probability of attending college post high school.