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20271- Public Economics
Lecture 11-12
A. Casarico
The technology of skill formation
Identify a technology of skill formation which is able to
explain six facts from recent empirical literature (Cuhna
and Heckman, 2007)
Fact 1
Ability gaps open up at early ages
Children of the NLSY
Average Standardized Score for PIAT Math by
Permanent Income Quartiles
The technology of skill formation
Fact 2
Evidence of sensitive and critical periods in the developing
of a child
On average if a second language is learned before
age 12, the child speaks it without an accent;
If syntax and grammar are not acquired early on,
they appear to be very difficult to learn on in life.
The technology of skill formation
Fact 3
High returns to remedial investments in young (rather than
adolescent) disadvantaged children
- Perinatal interventions that reduce fetal exposure to
alcohol and nicotine have substantial long-term effects
on cognition, socioemotional skills and health
The technology of skill formation
Fact 4
If early investments are not followed up by later
investments, their effects over time are reduced
Investments appear to be complementary and
require follow up to be effective.
The technology of skill formation
Fact 5
Effects of credit constraint on a child’s adult outcomes depend on
the age at which they bind for the child’s family
– Augmenting family income or reducing college tuition at
the stage of the life cycle when a child goes to college
does not go far in compensating for low levels of previous
– There is some evidence that credit constraints operating
in the early years have effects on adult ability and
schooling outcomes.
The technology of skill formation
Fact 6
Non cognitive skills foster cognitive skills
- Emotionally nurturing environments produce more
capable learners