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Intergenerational Long Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model

  • Heckman, James
  • Raut, Lakshmi

Using the NLSY79 and the NLSY79 Children and Young Adults datasets, this paper formulates, provides conditions for parametric and non-parametric identification and empirically estimates the parameters of an altruistic model of parental preschool investment within a structural dynamic programming framework. It then examines the effect of a publicly provided preschool policy to disadvantaged children on their educational and labor market achievements, and also on the inter-generational long-term effects on social mobility, college mobility, and earnings inequality. The paper calculates the tax burden of such a social contract policy, taking into account these intra- and inter-generational effects.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 20657.

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Date of creation: 27 Jan 2002
Date of revision: 23 Dec 2009
Handle: RePEc:pra:mprapa:20657
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  1. Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
  2. Victor Aguirregabiria & Pedro Mira, 1999. "Swapping the Nested Fixed-Point Algorithm: a Class of Estimators for Discrete Markov Decision Models," Computing in Economics and Finance 1999 332, Society for Computational Economics.
  3. Thomas, D. & Currie, J., 1993. "Does Head Start Make a Difference?," Papers 694, Yale - Economic Growth Center.
  4. Kazuo Nishimura & Lakshmi K. Raut, 2007. "School Choice and the Intergenerational Poverty Trap," Review of Development Economics, Wiley Blackwell, vol. 11(2), pages 412-420, 05.
  5. Cunha, Flavio & Heckman, James J. & Lochner, Lance John & Masterov, Dimitriy V., 2005. "Interpreting the Evidence on Life Cycle Skill Formation," IZA Discussion Papers 1675, Institute for the Study of Labor (IZA).
  6. James J. Heckman, 1999. "Policies to Foster Human Capital," NBER Working Papers 7288, National Bureau of Economic Research, Inc.
  7. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
  8. Janet Currie, 2001. "Early Childhood Education Programs," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 213-238, Spring.
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