Social Spillovers of Parental Absence: The Classroom Peer Effects of Left-behind' Children on Household Human Capital Investments in Rural China

While the human capital consequences of rural-to-urban migration on left-behind children have been well-documented in developing countries, there is limited evidence regarding the social spillovers of parental migration on households without parent-child separation. This study investigates the effects of migration-induced left-behind children on household human capital investments in their non-left-behind peers. Leveraging the random student-class assignment within middle schools in rural China, we find that the share of left-behind children in class has significant negative impacts on household financial and time investments in non-left-behind classmates, especially out-of-school education expenditure. We also find heterogeneous effects demonstrating that the adverse spillovers are relatively larger among students who are boys, in grade nine, and from low socioeconomic status families. Further, our results suggest that exposure to left-behind classmates adversely affects non-left-behind students' perceived quality of school life, cognitive and noncognitive skills, and their parents' beliefs about returns of human capital investments. We interpret these findings as candidate mechanisms underlying the associations between parental absence and household investments in non-left-behind children. Our study sheds new light on the 'costs' of rural-to-urban migration in sending areas, which include not only welfare loss to families being left behind but negative spillover effects on nonleft-behind households.