Socio-economic Status and Early Childhood Cognitive Skills: Is Latin America Different?

This paper documents differences in cognitive development – as measured by a receptive vocabulary test ? between children from households with high and low socioeconomic status (SES) in two different phases of childhood (before and after early school years) in four developing countries: Peru, Ethiopia, India and Vietnam. Intercontinental evidence on the timing, pattern, and persistence of these differences is provided. The non-parametric analysis suggests that differences found at the age of 5 persist into the early school years across all four countries, and the conditional analysis shows that the magnitude of within-country SES differences seem to diminish over time (with the exception of the India sample). However, both the magnitude of the gap and the degree of persistence vary. The main result is that Peru stands out, not only as the country with the largest cross-section difference between rich and poor (of around 1.30–1.40 standard deviations), but also as the country with the highest persistence in cognitive development, as shown by the value-added specification. Some channels behind these trends are discussed, but overall, the SES gradient persists even when controlling for a range of important mediators, such as preschool, early nutrition, and years of schooling. Past performance on the Peabody Picture Vocabulary Test (PPVT) is an important determinant of the SES gradient at the age of 8.