This paper summarizes evidence on the effects of early environments on child, adolescent, and adult achievement. Life cycle skill formation is a dynamic process in which early inputs strongly affect the productivity of later inputs.

Skill Formation and the Economics of Investing in Disadvantaged Children

The theory of precautionary saving is shown in this paper to be isomorphic to the Arrow-Pratt theory of risk aversion, making possible the application of a large body of knowledge about risk aversion to precautionary saving, and more generally, to the theory of optimal choice under risk In particular, a measure of the strength of precautionary saving motive analogous to the Arrow-Pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving, and to give a new interpretation of the Oreze-Modigliani substitution effect

Precautionary Saving in the Small and in the Large

This paper considers alternative policies for promoting skill formation that are targeted to different stages of the life cycle. We demonstrate the importance of both cognitive and noncognitive skills that are formed early in the life cycle in accounting for racial, ethnic and family background gaps in schooling and other dimensions of socioeconomic success. Most of the gaps in college attendance and delay are determined by early family factors. Children from better families and with high ability earn higher returns to schooling. We find only a limited role for tuition policy or family income supplements in eliminating schooling and college attendance gaps. At most 8% of American youth are credit constrained in the traditional usage of that term. The evidence points to a high return to early interventions and a low return to remedial or compensatory interventions later in the life cycle. Skill and ability beget future skill and ability. At current levels of funding, traditional policies like tuition subsidies, improvements in school quality, job training and tax rebates are unlikely to be effective in closing gaps.

https://papers.ssrn.com/sol3/Delivery.cfm/nber_w9495.pdf?abstractid=380480&mirid=1&type=2

Human Capital Policy

This paper presents a productivity argument for investing in disadvantaged young children. For such investment, there is no equity-efficiency tradeoff.(This abstract was borrowed from another version of this item.)

/pdf/the-productivity-argument-for-investing-in-young-children-1ego71kywf.pdf

The productivity argument for investing in young children.

The modern economic role of women emerged in four phases. The first three were evolutionary; the last was revolutionary. Phase I occurred from the late nineteenth century to the 1920s; Phase II was from 1930 to 1950; Phase III extended from 1950 to the late 1970s; and Phase IV, the "quiet revolution," began in the late 1970s and is still ongoing. Three aspects of women's choices distinguish the evolutionary from the revolutionary phases: horizon, identity, and decision-making. The evolutionary phases are apparent in time-series data on labor force participation. The revolutionary phase is discernible using time-series evidence on women's more predictable attachment to the workplace, greater identity with career, and better ability to make joint decisions with their spouses. Each of these series has a sharp break or inflection point signifying social and economic change. These changes, moreover, coincide by birth cohort or period. The relationship between the development of modern labor economics and the reality of women's changing economic role is explored. The paper concludes by assessing whether the revolution has stalled or is being reversed. Women who graduated college in the early 1980s did not "opt-out,"but recent cohorts are too young to evaluate.

/pdf/the-quiet-revolution-that-transformed-women-s-employment-1befylas53.pdf

The Quiet Revolution That Transformed Women's Employment, Education, and Family

Sustaining U.S. Economic Growth

More powerful and affluent today than ever, the United States has promising opportunities to influence the course of history. Yet these prospects are shadowed by significant perils and burdens. In this visionary book, leading scholars from the Brookings Institution and other prominent research organizations and universities analyze the major domestic and foreign policy problems facing the nation over the next five to ten years. The challenges on the domestic front are formidable: assuring fair but affordable access to health care, shoring up retirement income for an aging population, encouraging long-term economic growth, easing the growing pains of an increasingly diverse society, and reconciling energy policies with environmental concerns. In international affairs the central task is to use America's unprecedented power wisely and to protect a homeland that has been revealed as surprisingly vulnerable. Yet efforts must also focus on improving the economic fortunes of poorer countries, expanding trade, and reforming the rules that regulate the flows of capital across national borders. Is the United States government capable of rising to these vast and varied challenges? The concluding chapters of this book offer cautious optimism. While it is often criticized, the American political system is fundamentally resilient and flexible. Ambitious in scope, Agenda for the Nation provides thoughtful, constructive answers to questions of how the U.S. government can effectively serve its citizens and meet its global responsibilities in a world of opportunity and uncertainty.

Pietro S. Nivola

Papers

Sustaining U.S. Economic Growth

Agenda for the nation

Toward an Agenda