NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

James J. Heckman, Lakshmi K. Raut

NBER Working Paper No. 19077
Issued in May 2013
NBER Program(s):   CH   ED   TWP

This paper formulates a structural dynamic programming model of preschool investment choices of altruistic parents and then empirically estimates the structural parameters of the model using the NLSY79 data. The paper finds that preschool investment significantly boosts cognitive and non-cognitive skills, which enhance earnings and school outcomes. It also finds that a standard Mincer earnings function, by omitting measures of non-cognitive skills on the right hand side, overestimates the rate of return to schooling. From the estimated equilibrium Markov process, the paper studies the nature of within generation earnings distribution and intergenerational earnings and schooling mobility. The paper finds that a tax financed free preschool program for the children of poor socioeconomic status generates positive net gains to the society in terms of average earnings and higher intergenerational earnings and schooling mobility.

download in pdf format
   (174 K)

email paper

This paper is available as PDF (174 K) or via email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Users who downloaded this paper also downloaded these:
DeAngelo and Stulz w19139 Why High Leverage is Optimal for Banks
Aizenman and Noy w19067 Public and Private Saving and the Long Shadow of Macroeconomic Shocks
Christopoulou and Lillard w19036 Is Smoking Behavior Culturally Determined? Evidence from British Immigrants
Bruno and Shin w19084 Assessing Macroprudential Policies: Case of Korea
Blanchflower and Oswald w19079 Does High Home-Ownership Impair the Labor Market?
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us