In this paper, we study the process of children’s skill formation using a dynamic latent factor model to identify key features of the skill production function. We develop and estimate a joint dynamic process for latent investment and skill development, incorporating both static and dynamic complementarities between parental investments and children’s skills in the technology of skill formation. Our analysis of US data reveals that early childhood investments (age 5–6) are highly effective for cognitive skill development, with greater marginal productivity for children with lower existing skills. This suggests that targeting interventions at disadvantaged young children is most beneficial.

This paper provides novel insights into the science of scaling by examining an educational mentoring program in Mexico. The empirical analysis encompasses two independent field experiments and seizes a unique opportunity to learn from the government’s implementation of the same intervention. While the program originally implemented at scale demonstrates limited effectiveness, the introduction of a new modality with enhanced mentor training significantly improves children’s outcomes. Mentor-parent interactions are found to stimulate parental engagement at the community-school level. Our findings support the hypothesis that parents can play an important role in facilitating the scalability of educational programs.

During adolescence, peer interactions become increasingly central to children’s development, whereas the direct influence of parents wanes. Nevertheless, parents can continue to exert leverage by shaping their children’s peer groups. We construct and estimate a model of parenting with peer and neighborhood effects where parents intervene in peer formation and show that the model captures empirical patterns of skill accumulation, parenting style, and peer characteristics among US high school students. We find that interventions that move children to better neighborhoods lose impact when they are scaled up, because parents’ equilibrium responses push against successful integration with the new peer group.