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Skill Policies for Scotland

Listed author(s):
  • Heckman, James J.

    ()

    (University of Chicago)

  • Masterov, Dimitriy V.

    ()

    (University of Michigan)

This paper argues that skill formation is a life-cycle process and develops the implications of this insight for Scottish social policy. Families are major producers of skills, and a successful policy needs to promote effective families and to supplement failing ones. We present evidence that early disadvantages produce severe later disadvantages that are hard to remedy. We also show that cognitive ability is not the only determinant of education, labor market outcomes and pathological behavior like crime. Abilities differ in their malleability over the life-cycle, with noncognitive skills being more malleable at later ages. This has important implications for the design of policy. The gaps in skills and abilities open up early, and schooling merely widens them. Additional university tuition subsidies or improvements in school quality are not warranted by Scottish evidence. Company-sponsored job training yields a higher return for the most able and so this form of investment will exacerbate the gaps it is intended to close. For the same reason, public job training is not likely to help adult workers whose skills are rendered obsolete by skill-biased technological change. Targeted early interventions, however, have proven to be very effective in compensating for the effect of neglect.

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File URL: http://ftp.iza.org/dp1444.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1444.

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Length: 70 pages
Date of creation: Dec 2004
Publication status: published in: D. Coyle, W. Alexander and B. Ashcroft, eds., New Wealth for Old Nations: Scotland's Economic Prospects, Princeton University Press: 2005
Handle: RePEc:iza:izadps:dp1444
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  1. 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.
  2. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post-Secondary Schooling," NBER Working Papers 9055, National Bureau of Economic Research, Inc.
  3. Janet Currie & Duncan Thomas, 1993. "Does Head Start Make a Difference?," NBER Working Papers 4406, National Bureau of Economic Research, Inc.
  4. Carneiro, Pedro & Heckman, James J. & Masterov, Dimitriy V., 2005. "Labor Market Discrimination and Racial Differences in Premarket Factors," IZA Discussion Papers 1453, Institute for the Study of Labor (IZA).
  5. Susan M. Dynarski, 1999. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," NBER Working Papers 7422, National Bureau of Economic Research, Inc.
  6. Christian Dustmann & Najma Rajah & Arthur van Soest, 2003. "Class Size, Education, and Wages," Economic Journal, Royal Economic Society, vol. 113(485), pages 99-120, February.
  7. Pedro Carneiro & James J. Heckman & Edward J. Vytlacil, 2011. "Estimating Marginal Returns to Education," American Economic Review, American Economic Association, vol. 101(6), pages 2754-2781, October.
  8. Lans Bovenberg, A. & Jacobs, Bas, 2005. "Redistribution and education subsidies are Siamese twins," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2005-2035, December.
  9. Corak, Miles, 2001. "Death and Divorce: The Long-Term Consequences of Parental Loss on Adolescents," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 682-715, July.
  10. Dickens & David T. Ellwood, 2004. "Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 313-370 National Bureau of Economic Research, Inc.
  11. Stephen V. Cameron & James J. Heckman, 1991. "The Nonequivalence of High School Equivalents," NBER Working Papers 3804, National Bureau of Economic Research, Inc.
  12. Jo Blanden & Stephen Machin, 2004. "Educational Inequality and the Expansion of UK Higher Education," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(2), pages 230-249, 05.
  13. Dynarski, Susan, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," National Tax Journal, National Tax Association, vol. 53(3), pages 629-662, September.
  14. Donohue, John J, III & Siegelman, Peter, 1998. "Allocating Resources among Prisons and Social Programs in the Battle against Crime," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 1-43, January.
  15. Browning, Edgar K, 1987. "On the Marginal Welfare Cost of Taxation," American Economic Review, American Economic Association, vol. 77(1), pages 11-23, March.
  16. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2002. "Removing the Veil of Ignorance in Assessing the Distributional Impacts of Social Policies," NBER Working Papers 8840, National Bureau of Economic Research, Inc.
  17. Lorraine Dearden & Javier Ferri & Costas Meghir, 2000. "The effect of school quality on educational attainment and wages," IFS Working Papers W00/22, Institute for Fiscal Studies.
  18. Andrew Cherlin & Kathleen Kiernan & P. Chase-Lansdale, 1995. "Parental divorce in childhood and demographic outcomes in young adulthood," Demography, Springer;Population Association of America (PAA), vol. 32(3), pages 299-318, August.
  19. Ann P. Bartel, 1991. "Productivity Gains From the Implementation of Employee Training Programs," NBER Working Papers 3893, National Bureau of Economic Research, Inc.
  20. Couch, Kenneth A, 1992. "New Evidence on the Long-Term Effects of Employment Training Programs," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 380-388, October.
  21. David Card & Alan Krueger, 1990. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," NBER Working Papers 3358, National Bureau of Economic Research, Inc.
  22. Altonji, Joseph G & Dunn, Thomas A, 1996. "The Effects of Family Characteristics on the Return to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 692-704, November.
  23. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
  24. Thomas DeLeire & Ariel Kalil, 2001. "Good Things Come in Threes: Single-parent Multigenerational Family Structure and Adolescent Adjustment," JCPR Working Papers 242, Northwestern University/University of Chicago Joint Center for Poverty Research.
  25. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  26. Richard Blundell & Howard Reed & Thomas M. Stoker, 2003. "Interpreting Aggregate Wage Growth: The Role of Labor Market Participation," American Economic Review, American Economic Association, vol. 93(4), pages 1114-1131, September.
  27. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
  28. Susan Dynarski, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," NBER Working Papers 7756, National Bureau of Economic Research, Inc.
  29. repec:ntj:journl:v:53:y:2000:i:n._3:p:629-62 is not listed on IDEAS
  30. John Cawley & James Heckman & Edward Vytlacil, 1999. "On Policies To Reward The Value Added By Educators," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 720-727, November.
  31. Richard Blundell & Howard Reed & Thomas Stoker, 1999. "Interpreting aggregate wage growth," IFS Working Papers W99/13, Institute for Fiscal Studies.
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