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Ray Wang’s Economics of Parenting

His graduate research looks at the ways that families invest in their kids

Ray Wang’s academic trajectory changed when he was selected for a gifted program in elementary school. He left his inner-city Los Angeles classroom for a new school, and his intellectual curiosity blossomed.

Today, Wang, AG25, is a graduate student finishing his master’s in economics. His recent research examines how family income and child characteristics, such as giftedness or special needs, determine whether parents invest in extracurriculars and tutoring. 

He found that, in general, parents try to give their kids a boost in the areas where they are not already excelling: Academically gifted children had higher sports expenditures and were more likely to participate in extracurriculars like arts and music lessons than the average. Meanwhile, children in special education programs were more likely to receive tutoring. 

But income matters. Low-income families can invest much less than higher income families, which may mean making different choices. Notably, they respond to giftedness by decreasing sports participation, perhaps leaving more time for homework. 

Wang hopes his research can effectuate policy change to level the playing field for kids from various financial backgrounds.

What sparked your research interests?

I come from an immigrant family. I started my education in lower-income areas at public school. Through a gifted program, I was able to enroll into a better school in a better neighborhood. I had access to more resources and more rigorous and advanced curriculums. I remember that everyone in my fourth grade class had a laptop. 

I believe there was a clear difference in the quality of education. I’m very thankful that this happened for me, but it’s not necessarily true for everyone.

This inspired me to examine how parents react to kids who are tested into gifted and special ed programs—if they might choose to invest differently in their kids. I think it’s important to understand how households can impact children’s development. 

What were your findings, and what are the implications?

Parents react to giftedness and special needs status by balancing strengths and weaknesses and equalizing spending across their children, either on extracurriculars like art and sports or on tutoring. 

Secondly, high-income households respond more to both giftedness and special needs by spending more on extracurriculars than low-income households, likely due to financial capacity.

It’s likely true that more money means more opportunity. But the most important takeaway, I think, is that poorer families must make harder decisions between investing in one child’s extracurricular activity over another.

For instance, in less well-off families, gifted children have a lower likelihood of participating in sports, while in wealthier families, gifted children actually see an increase in sports participation. 

This is important because it informs an understanding of not just how parents invest in their children but also how intergenerational inequality might propagate through parental decisions. If family income affects a child’s early development, that will in turn impact their future education and earnings. This might mean lower labor market outcomes and lower family income when the child becomes an adult and forms their own family.

Why does your research matter?

I think the real application for my research is in education policy. Ultimately, family income is a major factor that determines how parents respond to their children’s statuses. It’s important that gifted program policies and identification take this into account. One possible change would be to shift the responsibility for responding to exceptional needs—gifted and special—into the hands of schools, through universal screenings or more regular gifted assessments, especially in low-income districts. 

If someone were to redesign programs, they might want to incorporate more support for access to sports and arts: perhaps a sports program to complement gifted children, or additional tutoring and arts programs for special needs children.

I think equity is important. Higher-income families are less constrained and are free to participate in more extracurricular activities without the need to trade one class for another. Also, there’s less reason to make choices about which children within the family get which extracurriculars. 

By understanding the behaviors and needs of lower-income families, schools can do a better job of addressing and accommodating parents by providing more extracurricular support for those children.