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Human Capital Growth and Poverty: Evidence from Ethiopia and Peru

Author

Listed:
  • Orazio Attanasio

    (University College London)

  • Costas Meghir

    (Yale University)

  • Emily Nix

    (Yale University)

  • Francesca Salvati

    (University College London)

Abstract

In this paper we use high quality data from two developing countries, Ethiopia and Peru, to estimate the production functions of human capital from age 1 to age 15. We characterize the nature of persistence and dynamic complementarities between two components of human capital: health and cognition. We also explore the implications of different functional form assumptions for the production functions. We find that more able and higher income parents invest more, particularly at younger ages when investments have the greatest impacts. These differences in investments by parental income lead to large gaps in inequality by age 8 that persist through age 15. (Copyright: Elsevier)

Suggested Citation

  • Orazio Attanasio & Costas Meghir & Emily Nix & Francesca Salvati, 2017. "Human Capital Growth and Poverty: Evidence from Ethiopia and Peru," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 25, pages 234-259, April.
  • Handle: RePEc:red:issued:16-113
    DOI: 10.1016/j.red.2017.02.002
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    References listed on IDEAS

    as
    1. Orazio Attanasio & Sarah Cattan & Emla Fitzsimons & Costas Meghir & Marta Rubio-Codina, 2015. "Estimating the Production Function for Human Capital: Results from a Randomized Control Trial in Colombia," Cowles Foundation Discussion Papers 1987, Cowles Foundation for Research in Economics, Yale University.
    2. Marta Rubio-Codina & Orazio Attanasio & Costas Meghir & Natalia Varela & Sally Grantham-McGregor, 2015. "The Socioeconomic Gradient of Child Development: Cross-Sectional Evidence from Children 6–42 Months in Bogota," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 464-483.
    3. Almond, Douglas & Currie, Janet, 2011. "Human Capital Development before Age Five," Handbook of Labor Economics, Elsevier.
    4. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
    5. Orazio Attanasio & Sarah Cattan & Emla Fitzsimons & Costas Meghir & Marta Rubio Codina, 2015. "Estimating the production function for human capital: results from a randomized controlled trial in Colombia," IFS Working Papers W15/06, Institute for Fiscal Studies.
    6. Daniela Del Boca & Christopher Flinn & Matthew Wiswall, 2014. "Household Choices and Child Development," Review of Economic Studies, Oxford University Press, vol. 81(1), pages 137-185.
    7. Susanne M. Schennach, 2004. "Estimation of Nonlinear Models with Measurement Error," Econometrica, Econometric Society, vol. 72(1), pages 33-75, January.
    8. Janet Currie, 2009. "Healthy, Wealthy, and Wise: Socioeconomic Status, Poor Health in Childhood, and Human Capital Development," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 87-122, March.
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    10. Yingyao Hu & Susanne M. Schennach, 2008. "Instrumental Variable Treatment of Nonclassical Measurement Error Models," Econometrica, Econometric Society, vol. 76(1), pages 195-216, January.
    11. 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).
    12. Flavio Cunha & James J. Heckman & Susanne M. Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," Econometrica, Econometric Society, vol. 78(3), pages 883-931, May.
    13. Raj Chetty & John N. Friedman & Jonah E. Rockoff, 2014. "Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates," American Economic Review, American Economic Association, vol. 104(9), pages 2593-2632, September.
    14. Raj Chetty & John N. Friedman & Jonah E. Rockoff, 2014. "Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood," American Economic Review, American Economic Association, vol. 104(9), pages 2633-2679, September.
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    17. repec:hrv:faseco:30749606 is not listed on IDEAS
    18. K. Sato, 1967. "A Two-Level Constant-Elasticity-of-Substitution Production Function," Review of Economic Studies, Oxford University Press, vol. 34(2), pages 201-218.
    19. Angus Deaton & Alan Heston, 2010. "Understanding PPPs and PPP-Based National Accounts," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 1-35, October.
    20. James Heckman & Tim Kautz, 2013. "Fostering and Measuring Skills: Interventions That Improve Character and Cognition," Working Papers 2013-019, Human Capital and Economic Opportunity Working Group.
    21. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    22. Prashant Bharadwaj & Katrine Vellesen L?ken & Christopher Neilson, 2013. "Early Life Health Interventions and Academic Achievement," American Economic Review, American Economic Association, vol. 103(5), pages 1862-1891, August.
    23. Escobal, Javier & Flores, Eva, 2008. "An Assessment of the Young Lives Sampling Approach in Peru," MPRA Paper 56483, University Library of Munich, Germany.
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    Cited by:

    1. Orazio Attanasio & Costas Meghir & Emily Nix, 2015. "Human Capital Development and Parental Investment in India," Cowles Foundation Discussion Papers 2026R, Cowles Foundation for Research in Economics, Yale University, revised Jul 2017.

    More about this item

    Keywords

    Cognitive skills; Health; Dynamic factor analysis; Parental investments; Child development; Human capital;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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