Working Paper: NBER ID: w9495
Authors: Pedro Carneiro; James Heckman
Abstract: This paper considers alternative policies for promoting skill formation that are targetted to different stages of the life cycle. We demonstrate the importance of both cognitive and noncognitive skills that are formed early in the life cycle in accounting for racial, ethnic and family background gaps in schooling and other dimensions of socioeconomic success. Most of the gaps in college attendance and delay are determined by early family factors. Children from better families and with high ability earn higher returns to schooling. We find only a limited role for tuition policy or family income supplements in eliminating schooling and college attendance gaps. At most 8% of American youth are credit constrained in the traditional usage of that term. The evidence points to a high return to early interventions and a low return to remedial or compensatory interventions later in the life cycle. Skill and ability beget future skill and ability. At current levels of funding, traditional policies like tuition subsidies, improvements in school quality, job training and tax rebates are unlikely to be effective in closing gaps.
Keywords: No keywords provided
JEL Codes: I2; I28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| early family background (J12) | educational attainment (I21) |
| early family background (J12) | cognitive and noncognitive skills (J24) |
| cognitive and noncognitive skills (J24) | educational attainment (I21) |
| family background (J12) | returns to schooling (I26) |
| traditional policies (tuition subsidies and income supplements) (H53) | educational gaps (I24) |
| early interventions (I24) | return on investment (G31) |
| remedial measures (Y20) | return on investment (G31) |