Money matters, but care matters more

Across low- and middle-income countries, economic opportunity and parental presence are often in direct conflict. When work is far from home, whether in a distant city or another country entirely, parents must choose between earning for their children and being at home with them. The consequences of that choice, it turns out, run deeper than most people realize. China's experience offers some of the richest evidence on this, but the story is global.
 

The global scale of the problem

When we look at co-residence patterns across countries with available and comparable survey data, a striking pattern emerges: a non-trivial share of children in many parts of the world live with neither parent (Figure 1). In parts of Sub-Saharan Africa, South Asia, and Central America, economic migration, both internal and international, routinely separates children from their parents for months or years at a time. The same dynamic that plays out in rural China plays out when parents migrate across borders rather than within them, whether from the Philippines to the Gulf, from Mexico to the United States, or from Moldova to Western Europe.
 

Figure 1: Share of children living with neither parent

^{Source: Holla, Schady, and Silva (2026)}

This is the context for our latest report,  Building Human Capital Where It Matters: Homes, Neighborhoods, and Workplaces,  which makes the economic case for investing in settings beyond schools and clinics to spur human capital accumulation. The home is one of these critical settings.  
 

Resources cannot compensate for deficits in care

The report shows that gaps among children emerge early, even before a child starts school, and they persist throughout childhood and adolescence (to see this finding and others, check out the report’s interactive graphs). Building human capital requires both resources and care. A nutritious diet, books to read, toilets, and education all contribute to human capital, and families need to spend money on these.  But the home is also important because family members typically care for each other. Parents in particular care for their children. They play and sing with their children, read to them, model good behaviors, and help them navigate complex emotions. These are investments that income alone cannot replicate.

In the report, we use data from the China Family Panel Studies to investigate what happens to the human capital of children remaining in the care of other relatives when their parents migrate for work. These children give us a unique way to study the role of care, because their households typically have more income — not less.

Indeed, our results suggest that the absence of both parents has significant consequences for children’s human capital.

In the figure, we define a child as “left-behind” if they report seeing their parents zero times in a typical week. The survey suggests that 1 in 4 children in rural China have been in this state at some point in their childhood.  We can also distinguish among these children because the longitudinal nature of the data allows us to observe children in the 10-17 age group at least three times, so we can distinguish among those who presently don’t see their parents but were not in this situation in the past, those who were in this situation in the past but are not currently, and those who have been chronically in this situation across all survey rounds (Figure 2).
 

Figure 2: Income and human capital of children ages 10-17, China, by whether children have been left behind at home when their parents migrate for work

^{Source: Holla, Schady, and Silva (2026)}

Our results show that children who have been left behind when their parents migrate for work live in households with higher annual household income. Usually, more resources translate into more human capital. When we look at current measures of the children’s human capital, however, we get a very different picture. Children who report never seeing their parents in a typical week have lower scores in math and vocabulary, and they are more likely to report feeling depressed. Let’s consider children who are presently in this situation, but who were not in the past. Compared to children who were never in this situation, they are half of a year behind in math and a quarter of a year behind in vocabulary. They are 20 percent more likely to report feeling depressed. Children who were in this situation in the past but not in the present still exhibit disadvantages in math, vocabulary, and mental health. The message is clear: money matters, but parental presence matters more.
 

What can be done?

In the report Building Human Capital Where It Matters, we argue that improving children's outcomes requires policies that focus on improving the care environments of children, and we summarize evidence on programs that have sought to do this by counselling parents on what they can do to provide more nurturing care at home and preschool programs that more directly build children’s cognitive and social-emotional skills.

For children who are left behind at home when their parents migrate for work, these programs need to be redesigned with grandparents in mind. Grandparents are the de facto primary caregivers for many of these children, yet most parenting programs are designed for mothers. Adapting them for grandparents, who may face distinct challenges in understanding and responding to children's developmental needs, represents a significant and underexplored policy gap. Closing that gap is one of the most direct investments we can make in children who are growing up without their parents nearby.