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The Technology of Skill Formation

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Author Info

  • James Heckman
  • Flavio Cunha

Abstract

his paper presents formal models of child development that capture the essence of recent findings from the empirical literature on child development. The goal is to provide theoretical frameworks for interpreting the evidence from a vast empirical literature, for guiding the next generation of empirical studies and for formulating policy. We start from the premise that skill formation is a life-cycle process. It starts in the womb and goes on throughout most of the adult life. Families and firms have a role in this process that is at least as important as the role of schools. There are multiple skills and multiple abilities that are important for adult success. Abilities are both inherited and created, and the traditional debate of nature versus nurture is outdated and scientifically obsolete. The technology of skill formation has two additional important characteristics. The first one is that IQ and behavior are more plastic at early ages than at later ages. Furthermore, behavior is much more malleable than IQ as individuals age. The second is that human capital investments are complementary over time. Early investments increase the productivity of later investments. Early investments are not productive if they are not followed up by later investments. The returns to investing early in the life cycle are high. Remediation of inadequate early investments is difficult and very costly

(This abstract was borrowed from another version of this item.)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.97.2.31
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 97 (2007)
Issue (Month): 2 (May)
Pages: 31-47

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Handle: RePEc:aea:aecrev:v:97:y:2007:i:2:p:31-47

Note: DOI: 10.1257/aer.97.2.31
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References

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  1. Aiyagari, S. Rao & Greenwood, Jeremy & Seshadri, Ananth, 2002. "Efficient Investment in Children," Journal of Economic Theory, Elsevier, vol. 102(2), pages 290-321, February.
  2. Flavio Cunha & James J. Heckman & Lance Lochner & Dimitriy V. Masterov, 2005. "Interpreting the Evidence on Life Cycle Skill Formation," NBER Working Papers 11331, National Bureau of Economic Research, Inc.
  3. Bénabou, Roland, 2000. "Tax And Education Policy In A Heterogeneous Agent Economy: What Levels Of Redistribution Maximize Growth And Efficiency?," CEPR Discussion Papers 2446, C.E.P.R. Discussion Papers.
  4. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
  5. Bhargava, Alok, 2008. "Food, Economics, and Health," OUP Catalogue, Oxford University Press, number 9780199269143.
  6. Hansen, Karsten T. & Heckman, James J. & Mullen, Kathleen J., 2003. "The Effect of Schooling and Ability on Achievement Test Scores," IZA Discussion Papers 826, Institute for the Study of Labor (IZA).
  7. Susanne Schennach & James Heckman & Flavio Cunha, 2007. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," 2007 Meeting Papers 973, Society for Economic Dynamics.
  8. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
  9. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
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  14. Knudsen, Eric I. & Heckman, James J. & Cameron, Judy L. & Shonkoff, Jack P., 2006. "Economic, Neurobiological and Behavioral Perspectives on Building America's Future Workforce," IZA Discussion Papers 2190, Institute for the Study of Labor (IZA).
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  20. Stephen V. Cameron & Christopher Taber, 2004. "Estimation of Educational Borrowing Constraints Using Returns to Schooling," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 132-182, February.
  21. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," NBER Working Papers 12006, National Bureau of Economic Research, Inc.
  22. John M. Barron & Mark C. Berger & Dan A. Black, 2006. "Selective Counteroffers," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 385-410, July.
  23. Eliana Garces & Duncan Thomas & Janet Currie, 2002. "Longer-Term Effects of Head Start," American Economic Review, American Economic Association, vol. 92(4), pages 999-1012, September.
  24. Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc.
  25. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  26. Janet Currie & Duncan Thomas, 2000. "School Quality and the Longer-Term Effects of Head Start," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 755-774.
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  28. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, October.
  29. Flavio Cunha & James J. Heckman, 2008. "Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
  30. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  31. Bruce A. Weinberg, 2001. "An Incentive Model of the Effect of Parental Income on Children," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 266-280, April.
  32. Case, Anne & Fertig, Angela & Paxson, Christina, 2005. "The lasting impact of childhood health and circumstance," Journal of Health Economics, Elsevier, vol. 24(2), pages 365-389, March.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Baby P: some questions
    by chris dillow in Stumbling and Mumbling on 2008-11-14 15:06:17
  2. Human capital policies and inequality in recessions’ times
    by laurence-df in OFCE le blog on 2012-12-20 10:52:08
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