Human Capital Development Before Age Five
This chapter seeks to set out what Economists have learned about the effects of early childhood influences on later life outcomes, and about ameliorating the effects of negative influences. We begin with a brief overview of the theory which illustrates that evidence of a causal relationship between a shock in early childhood and a future outcome says little about whether the relationship in question biological or immutable. We then survey recent work which shows that events before five years old can have large long term impacts on adult outcomes. Child and family characteristics measured at school entry do as much to explain future outcomes as factors that labor economists have more traditionally focused on, such as years of education. Yet while children can be permanently damaged at this age, an important message is that the damage can often be remediated. We provide a brief overview of evidence regarding the effectiveness of different types of policies to provide remediation. We conclude with a list of some of (the many) outstanding questions for future research.
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We thank Maya Rossin and David Munroe for excellent research assistance, participants in the Berkeley Handbook of Labor Economics Conference in November 2009 for helpful comments, and Christine Pal and Hongyan Zhao for proofreading the equations. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Chapter 15 in "Handbook of Labor Economics", Volume 4: Orley Ashenfelter and David Card, editors