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The Econometrics of Early Childhood Human Capital and Investments

Author

Listed:
  • Flavio Cunha

    (Department of Economics, Rice University, Houston, Texas 77251, USA)

  • Eric Nielsen

    (Division of Research and Statistics, Federal Reserve Board, Washington, DC 20551, USA)

  • Benjamin Williams

    (Department of Economics, George Washington University, Washington, DC 20052, USA)

Abstract

This article reviews recent developments in the econometrics of early childhood human capital and investments. We start with a discussion about the lack of cardinality in test scores, the reasons it matters for empirical research on human capital, and the approaches researchers have used to address this problem. Next, we discuss how the literature has accounted for the errors in human capital measurements and investments. Then, we focus on the estimation of production functions of human capital. We present two different specifications of the production function and discuss when to use one versus the other. We describe how researchers have addressed cardinality, measurement errors, and endogeneity of inputs to estimate the technology of skill formation. Finally, we take stock of the work to date, and we identify opportunities for new research directions in this field.

Suggested Citation

  • Flavio Cunha & Eric Nielsen & Benjamin Williams, 2021. "The Econometrics of Early Childhood Human Capital and Investments," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 487-513, August.
    • Handle: RePEc:anr:reveco:v:13:y:2021:p:487-513
    DOI: 10.1146/annurev-economics-080217-053409
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    Citations

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    Cited by:

    1. Heckman, James J. & Zhou, Jin, 2022. "Measuring Knowledge," IZA Discussion Papers 15252, Institute of Labor Economics (IZA).
    2. Maria Klonowska-Matynia, 2022. "Human Capital as a Source of Energy for Rural Areas’ Socio-Economic Development—Empirical Evidence for Rural Areas in Poland," Energies, MDPI, vol. 15(21), pages 1-31, November.
    3. James J. Heckman & Jin Zhou, 2022. "Measuring Knowledge and Learning," NBER Working Papers 29990, National Bureau of Economic Research, Inc.
    4. Rajah, Nasir & Mattock, Richard & Martin, Adam, 2023. "How do childhood ADHD symptoms affect labour market outcomes?," Economics & Human Biology, Elsevier, vol. 48(C).
    5. Simon Calmar Andersen & Simon Tranberg Bodilsen & Mikkel Aagaard Houmark & Helena Skyt Nielsen & Helena Skyt Nielsen, 2022. "Fade-Out of Educational Interventions: Statistical and Substantive Sources," CESifo Working Paper Series 10094, CESifo.
    6. Domicolo, Carly & Nielsen, Eric, 2022. "Male–female achievement variance comparisons are not robust," Economics Letters, Elsevier, vol. 220(C).
    7. Matthew Harding & Carlos Lamarche & Chris Muris, 2022. "Estimation of a Factor-Augmented Linear Model with Applications Using Student Achievement Data," Papers 2203.03051, arXiv.org.

    More about this item

    Keywords

    early childhood; human capital; measurement error; cardinality;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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