Multigenerational Human Capital: How Grandparents Drive Cognitive Development Across Generations

Do grandparents continue to play a vital role in their grandchildren’s lives even in societieswhere child health is no longer a primary concern? This study explores how theinvolvement of grandparents, traditionally associated with reproductive success, hasevolved to support human capital formation. Drawing on the human capital framework,we rigorously model both grandparental and parental investments, examiningtheir joint effects on cognitive development over time. Additionally, we explore howearly nutritional status and cognitive abilities may influence subsequent investments.Using longitudinal data from the Young Lives study, which tracks children in Ethiopia,India, Vietnam, and Peru, we model the joint effect of support from grandparentsand parental investments on children’s cognitive ability. We find that early childhoodinvestments have a lasting impact on developmental outcomes. Our results demonstratethat grandparents’ involvement significantly enhances cognitive development inearly childhood, with effects reaching nearly half the magnitude of parental investments.Moreover, these early influences indirectly shape cognitive outcomes later inchildhood. Notably, their contribution amounts to half a year of schooling indirectlyin Ethiopia, one-quarter in India, and around one month in Peru and Vietnam.