Errors in recalling childhood socio-economic status: the role of anchoring and household formation in South Africa

Stellenbosch Working Paper Series No. WP18/2014 (revised, version: 2)
 
Publication date: 2014
 
Author(s):
[protected email address] (Department of Economics, University of Stellenbosch)
[protected email address] (School of Built Environment and Development Studies, University of KwaZulu-Natal)
 
Abstract:

In the absence of longitudinal data that track individuals over an extended period of time, information on childhood socio-economic status can be provided by questions that ask adults to recall their parents’ education or their economic status at childhood. The usefulness of these data, however, requires that people are willing to report this information, and that these reports do not vary systematically over time, for example in response to changes in current circumstances. In this paper, we evaluate recall data for South Africa, collected from the same adults in the first two waves of a national panel survey. We show that the data, particularly on father’s education, are compromised by very low and selective response, reflecting the fragmented nature of many South African families. Among those who do provide information, parental education is reported more consistently over time than the subjective appraisals of childhood economic status. However, we find also that both sets of indicators are sensitive to changes in current income, which would be consistent with anchoring effects. Furthermore changes in subjective appraisals of the past are highly correlated with changes in subjective appraisals of the present.

 
JEL Classification:

J13, C83, D1

Keywords:

retrospective data, socio-economic status, childhood reach, anchoring

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BER Weekly

14 October 2019
While incoming data on the global economy remains downbeat, the mood was lifted last week after progress was made on US-China trade talks and Brexit negotiations. On the domestic data front, mining and manufacturing data for August added to growing evidence that real GDP growth likely slowed significantly in 2019Q3 after the nice rebound recorded in...

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