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Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes

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  • Orla Doyle
  • Colm Harmon
  • James J. Heckman
  • Caitriona Logue
  • Seong Moon

Abstract

The literature on skill formation and human capital development clearly demonstrates that early investment in children is an equitable and efficient policy with large returns in adulthood. Yet little is known about the mechanisms involved in producing these long-term effects. This paper presents early evidence on the nature of skill formation based on an experimentally designed, five-year home visiting program in Ireland targeting disadvantaged families - Preparing for Life (PFL). We examine the impact of investment between utero to 18 months of age on a range of parental and child outcomes. Using the methodology of Heckman et al. (2010a), permutation testing methods and a stepdown procedure are applied to account for the small sample size and the increased likelihood of false discoveries when examining multiple outcomes. The results show that the program impact is concentrated on parental behaviors and the home environment, with little impact on child development at this early stage. This indicates that home visiting programs can be effective at offsetting deficits in parenting skills within a relatively short timeframe, yet continued investment may be required to observe direct effects on child development. While correcting for attrition bias leads to some changes in the precision of estimates, overall the results are quite similar.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19316.

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Date of creation: Aug 2013
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Handle: RePEc:nbr:nberwo:19316

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References

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  1. Cunha, Flavio & Heckman, James J., 2007. "The Technology of Skill Formation," IZA Discussion Papers 2550, Institute for the Study of Labor (IZA).
  2. Heckman, James J. & Moon, Seong Hyeok & Pinto, Rodrigo & Savelyev, Peter & Yavitz, Adam, 2010. "Analyzing Social Experiments as Implemented: A Reexamination of the Evidence from the HighScope Perry Preschool Program," IZA Discussion Papers 5095, Institute for the Study of Labor (IZA).
  3. Orla Doyle, 2012. "Breaking the Cycle of Deprivation: An Experimental Evaluation of an Early Childhood Intervention," Working Papers 201212, Geary Institute, University College Dublin.
  4. Joseph P. Romano & Michael Wolf, 2005. "Exact and Approximate Stepdown Methods for Multiple Hypothesis Testing," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 94-108, March.
  5. Eric Knudsen & James J. Heckman & Judy Cameron & Jack P. Shonkoff, 2006. "Economic, Neurobiological and Behavioral Perspectives on Building America’s Future Workforce," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 7(3), pages 17-41, July.
  6. 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).
  7. Doyle, Orla & Harmon, Colm P. & Heckman, James J. & Tremblay, Richard E., 2009. "Investing in early human development: Timing and economic efficiency," Economics & Human Biology, Elsevier, vol. 7(1), pages 1-6, March.
  8. Joseph P. Romano & Azeem M. Shaikh & Michael Wolf, 2010. "Hypothesis Testing in Econometrics," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 75-104, 09.
  9. LeCroy, Craig Winston & Krysik, Judy, 2011. "Randomized trial of the healthy families Arizona home visiting program," Children and Youth Services Review, Elsevier, vol. 33(10), pages 1761-1766, October.
  10. Sarah Avellar & Diane Paulsell, 2011. "Lessons Learned from the Home Visiting Evidence of Effectiveness Review," Mathematica Policy Research Reports 7046, Mathematica Policy Research.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes
    by Liam Delaney in Economics, Psychology and Policy on 2013-08-09 15:18:00
  2. Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes
    by maximorossi in NEP-LTV blog on 2013-09-25 12:15:21
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Cited by:
  1. Arnaud Chevalier & Olivier Marie, 2013. "Economic Uncertainty, Parental Selection, and the Criminal Activity of the 'Children of the Wall'," CESifo Working Paper Series 4462, CESifo Group Munich.
  2. Sandner, Malte, 2013. "Effects of Early Childhood Intervention on Child Development and Early Skill Formation. Evidence from a Randomized Controlled Trial," Hannover Economic Papers (HEP) dp-518, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

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