Journal Article

Estimating the technology of cognitive and noncognitive skill formation

Cunha, Flavio, Schennach, Susanne M., Heckman, James J.

2010

Overview

This paper formulates and estimates multistage production functions for children's cognitive and noncognitive skills. Skills are determined by parental environments and investments at different stages of childhood. We estimate the elasticity of substitution between investments in one period and stocks of skills in that period to assess the benefits of early investment in children compared to later remediation. We establish nonparametric identification of a general class of production technologies based on nonlinear factor models with endogenous inputs. A by-product of our approach is a framework for evaluating childhood and schooling interventions that does not rely on arbitrarily scaled test scores as outputs and recognizes the differential effects of the same bundle of skills in different tasks. Using the estimated technology, we determine optimal targeting of interventions to children with different parental and personal birth endowments. Substitutability decreases in later stages of the life cycle in the production of cognitive skills. It is roughly constant across stages of the life cycle in the production of noncognitive skills. This finding has important implications for the design of policies that target the disadvantaged. For most configurations of disadvantage it is optimal to invest relatively more in the early stages of childhood than in later stages.

• Publisher: Blackwell Publishing Ltd,Econometric Society,Wiley-Blackwell
• Subject: anchoring test scores / Applications / Bildungsinvestition / Bildungsniveau / Biology, psychology, social sciences / Child development / Childhood / Children / Children & youth / Cognition / Cognition & reasoning / Cognitive ability / Cognitive models / Cognitive psychology / Cognitive skills / Combinatorics / Combinatorics. Ordered structures / Designs and configurations / Disadvantaged / dynamic factor analysis / Economics of education / Elasticity / Eltern / endogeneity of inputs / Endogenous / Endowments / Exact sciences and technology / Experimental design / Faktorenanalyse / Familiensoziologie / Financial investments / Human capital / Insurance, economics, finance / Intelligenz / Intervention / Investition / Investments / Kind / Kinder / Kognitive Kompetenz / Life cycles / Mathematics / Modeling / noncognitive skills / Outcomes of education / Parent-child relations / parental influence / Parental investment / Parents & parenting / Probability and statistics / Production / Production functions / Schooling / Schätzung / Sciences and techniques of general use / Skills / Statistics / Stocks / Studies / Technology / Test scores / Theorie / Thinking skills / USA