Intergenerational Human Capital Transmission: Grandparental Contributions to Grandchildren Cognitive Development

Michael Lund, Spanish National Research Council (CSIC)
Ismael Munoz, IEGD-CCHS Spanish National Research Council (CSIC)
Alberto Palloni, University of Wisconsin-Madison

Do grandparents continue to play a vital role in their grandchildren’s lives even in societies where child health is no longer a primary concern? This study explores how grandparental involvement, traditionally associated with reproductive success, has evolved to support human capital formation. Drawing on the human capital framework, we rigorously model both grandparental and parental investments, examining their joint effects on cognitive development over time. Additionally, we explore how early health status and cognitive abilities 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 grandparental and parental investments on children’s cognitive ability using Structural Equation Modeling (SEM). We find that investments in early childhood have an impact on. Our findings demonstrate that grandparental involvement significantly improves cognitive development in early childhood, with effects nearly half the size of parental investments, and indirectly shaping cognitive outcomes later in childhood. Interestingly, grandparents—but not parents—tend to increase their investment when a child is healthier at birth.

Keywords: Human Capital, Education, and Work, Older Adults and Intergenerational Relations, Longitudinal studies , Structural equation modelling

See extended abstract.