Past estimates of the effect of family income on child development have often been plagued by endogeneity and measurement error. In this paper, we use two simulated instrumental variables strategies to estimate the causal effect of income on children's math and reading achievement. Our identification derives from the large, non-linear changes…

Global economic transformations have never been as dramatic as in the twentieth century. Most countries have experienced radical changes in the standards of income per capita, technology, fertility, mortality, income inequality and the extent of democracy in the course of the past century. It is the goal of many disciplines--economics, history,…