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This paper uses three-generation retrospective data from the rural Philippines toexamine the role of the extended family, proxied by alternative measures ofgrandparent coresidence, on investments in children. An extension of the wealthmodel of intergenerational transfers shows that extended family resources may affecttransfers to children if parents are credit constrained. Family-level unobservables areimportant in determining the allocation of education and land between sons anddaughters. Both parent and grandparent pre-marriage wealth affect children’scompleted schooling levels. Grandparent wealth, however, does not seem to affect thedistribution of education between sons and daughters, although it affects the allocationof land. Grandparent influence on child schooling appears to work through proximityrather than through wealth. Sons are clearly favored in terms of land inheritance,while daughters get more education. Better educated fathers favor daughters in termsof education, while mothers with more land favor sons. These patterns are consistentwith both equity and efficiency objectives, investment in children under resourceconstraints, and parents' risk-diversification strategies.
