Exploring socioeconomic-related inequality in children’s cognitive achievement in Peru

This paper applies the concentration index to estimate socioeconomic-related inequality in language skills among children aged 5 to 15, using longitudinal data from Peru. We find the existence of socioeconomic-related inequality in language skills, starting from an early age and showing little change until adolescence, albeit dropping. The cognitive achievement regression estimates highlight the significant role of family socioeconomic status (SES) on children’s language performance. Our decomposition analysis strengthens this result, indicating parental SES as the major contributor to socioeconomic-related inequality in language skills, even after accounting for the lagged test scores. We further decompose the source of changes in socioeconomic-related inequality in language skills between ages 5 and 15, and show changes in household wealth inequality and the associated elasticity both contribute to changes in socioeconomic-related inequalities in language performance.