Labor contracts and parents' educational expectations for children: Income effect or expected effect?

Parental educational expectations have an important effect on children's human capital accumulation. Using the data from the China Family Panel Studies in 2016 (CFPS-2016), this article studies the impact and mechanism of whether parents sign labor contracts on their educational expectations for children. The findings are follows: (i) signing the labor contracts can encourage parents to raise their educational expectations for children; (ii) signing the contracts influence their educational expectations for children mainly through the expected effect brought out by the five social insurances (pension, medical, unemployment, work injury and maternity) and one housing fund, but the income effect does not work; (iii) signing the labor contracts will only raise parental educational expectations for boys; (iv) compared with fathers, the labor contracts of mothers do not affect the educational expectations for children. Therefore, we believe that the improvement and implementation of the labor contracts system as well as a good employment and social protection is of great significance to further promote the human capital level and the long-term economic growth, especially for the developing countries.