Allander Series: Skill Policies for Scotland

James J. Heckman, Dimitriy V. Masterov

NBER Working Paper No. 11032
Issued in January 2005
NBER Program(s):Economics of Education, Labor Studies, Public Economics, Children

This paper argues that skill formation is a life-cycle process and develops the implications of this insight for Scottish social policy. Families are major producers of skills, and a successful policy needs to promote effective families and to supplement failing ones. We present evidence that early disadvantages produce severe later disadvantages that are hard to remedy. We also show that cognitive ability is not the only determinant of education, labor market outcomes and pathological behavior like crime. Abilities differ in their malleability over the life-cycle, with noncognitive skills being more malleable at later ages. This has important implications for the design of policy. The gaps in skills and abilities open up early, and schooling merely widens them. Additional university tuition subsidies or improvements in school quality are not warranted by Scottish evidence. Company-sponsored job training yields a higher return for the most able and so this form of investment will exacerbate the gaps it is intended to close. For the same reason, public job training is not likely to help adult workers whose skills are rendered obsolete by skill-biased technological change. Targeted early interventions, however, have proven to be very effective in compensating for the effect of neglect.

download in pdf format
   (1288 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w11032

Published: Coyle, D., W. Alexander and B. Ashcroft (eds.) New Wealth for Old Nations: Scotland’s Economic Prospects. Princeton and Oxford: Princeton University Press, 2005.

Users who downloaded this paper also downloaded* these:
Cunha, Heckman, Lochner, and Masterov w11331 Interpreting the Evidence on Life Cycle Skill Formation
Heckman and Masterov w13016 The Productivity Argument for Investing in Young Children
Beegle, Dehejia, and Gatti w10980 Why Should We Care About Child Labor? The Education, Labor Market, and Health Consequences of Child Labor
Carneiro and Heckman w9055 The Evidence on Credit Constraints in Post-Secondary Schooling
Hall and Helmers w16323 The role of patent protection in (clean/green) technology transfer
NBER Videos

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

Contact Us