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The Economics and Psychology of Inequality and Human Development

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Author Info
Cunha, Flavio () (University of Pennsylvania)
Heckman, James J. () (University of Chicago)

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Abstract

Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4001.

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Length: 2009 pages
Date of creation: Feb 2009
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Publication status: published in: Journal of the European Economic Association, 2009, 7(2-3), 320 - 364
Handle: RePEc:iza:izadps:dp4001

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Related research
Keywords: human development; noncognitive traits; capabilities; inequality; technology of capability formation; policy targeting;

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Find related papers by JEL classification:
A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Guido Cozzi & Fabio Privileggi, 2009. "The fractal nature of inequality in a fast growing world: new version," Working Papers 2009_30, Department of Economics, University of Glasgow. [Downloadable!]
  2. Corneo, Giacomo, 2009. "Symbolic Values, Value Formation and Interpersonal Relations," IZA Discussion Papers 4315, Institute for the Study of Labor (IZA). [Downloadable!]
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