TY  - JOUR
AU  - Cunha,Flavio
AU  - Heckman,James J.
TI  - The Economics and Psychology of Inequality and Human Development
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14695
PY  - 2009
Y2  - January 2009
UR  - http://www.nber.org/papers/w14695
L1  - http://www.nber.org/papers/w14695.pdf
N1  - Author contact info:
Flavio Cunha
Department of Economics
University of Pennsylvania
160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104-6297
Tel: 215/898-5652
E-Mail: fcunha@sas.upenn.edu

James J. Heckman
Department of Economics
The University of Chicago
1126 E. 59th Street
Chicago, IL 60637
Tel: 773/702-0634
Fax: 773/702-8490
E-Mail: jjh@uchicago.edu
AB  - Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.
ER  -