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Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes

Author

Listed:
  • Doyle, Orla

    (University College Dublin)

  • Harmon, Colm P.

    (University of Edinburgh)

  • Heckman, James J.

    (University of Chicago)

  • Logue, Caitriona

    (University College Dublin)

  • Moon, Seong Hyeok

    (University of Chicago)

Abstract
The literature on skill formation and human capital development clearly demonstrates that early investment in children is an equitable and efficient policy with large returns in adulthood. Yet little is known about the mechanisms involved in producing these long-term effects. This paper presents early evidence on the nature of skill formation based on an experimentally designed, five-year home visiting program in Ireland targeting disadvantaged families - Preparing for Life (PFL). We examine the impact of investment between utero to 18 months of age on a range of parental and child outcomes. Using the methodology of Heckman et al. (2010a), permutation testing methods and a stepdown procedure are applied to account for the small sample size and the increased likelihood of false discoveries when examining multiple outcomes. The results show that the program impact is concentrated on parental behaviors and the home environment, with little impact on child development at this early stage. This indicates that home visiting programs can be effective at offsetting deficits in parenting skills within a relatively short timeframe, yet continued investment may be required to observe direct effects on child development. While correcting for attrition bias leads to some changes in the precision of estimates, overall the results are quite similar.

Suggested Citation

  • Doyle, Orla & Harmon, Colm P. & Heckman, James J. & Logue, Caitriona & Moon, Seong Hyeok, 2013. "Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes," IZA Discussion Papers 7550, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7550
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    References listed on IDEAS

    as
    1. Orla Doyle, 2012. "Breaking the Cycle of Deprivation: An Experimental Evaluation of an Early Childhood Intervention," Working Papers 201212, Geary Institute, University College Dublin.
    2. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
    3. Doyle, Orla & Harmon, Colm P. & Heckman, James J. & Tremblay, Richard E., 2009. "Investing in early human development: Timing and economic efficiency," Economics & Human Biology, Elsevier, vol. 7(1), pages 1-6, March.
    4. James Heckman & Seong Hyeok Moon & Rodrigo Pinto & Peter Savelyev & Adam Yavitz, 2010. "Analyzing social experiments as implemented: A reexamination of the evidence from the HighScope Perry Preschool Program," Quantitative Economics, Econometric Society, vol. 1(1), pages 1-46, July.
    5. Orla Doyle & Kelly McNamara & Carly Cheevers & Sarah Finnegan & Caitriona Logue & Louise McEntee, 2010. "Preparing for Life Early Childhood Intervention. Impact Evaluation Report 1: Recruitment and Baseline Characteristics," Working Papers 201050, Geary Institute, University College Dublin.
    6. Knudsen, Eric I. & Heckman, James J. & Cameron, Judy L. & Shonkoff, Jack P., 2006. "Economic, Neurobiological and Behavioral Perspectives on Building America's Future Workforce," IZA Discussion Papers 2190, Institute of Labor Economics (IZA).
    7. Joseph P. Romano & Michael Wolf, 2005. "Exact and Approximate Stepdown Methods for Multiple Hypothesis Testing," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 94-108, March.
    8. Eric Knudsen & James J. Heckman & Judy Cameron & Jack P. Shonkoff, 2006. "Economic, Neurobiological and Behavioral Perspectives on Building America’s Future Workforce," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 7(3), pages 17-41, July.
    9. LeCroy, Craig Winston & Krysik, Judy, 2011. "Randomized trial of the healthy families Arizona home visiting program," Children and Youth Services Review, Elsevier, vol. 33(10), pages 1761-1766, October.
    10. James Heckman & Seong Hyeok Moon & Rodrigo Pinto & Peter Savelyev & Adam Yavitz, 2010. "Analyzing social experiments as implemented: evidence from the HighScope Perry Preschool Program," CeMMAP working papers CWP22/10, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    11. Joseph P. Romano & Azeem M. Shaikh & Michael Wolf, 2010. "Hypothesis Testing in Econometrics," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 75-104, September.
    12. repec:mpr:mprres:7046 is not listed on IDEAS
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes
      by maximorossi in NEP-LTV blog on 2013-09-25 17:15:21
    2. Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes
      by Liam Delaney in Economics, Psychology and Policy on 2013-08-09 20:18:00

    Citations

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    Cited by:

    1. Arnaud Chevalier & Olivier Marie, 2013. "Economic Uncertainty, Parental Selection, and the Criminal Activity of the "Children of the Wall"," SOEPpapers on Multidisciplinary Panel Data Research 605, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Orla Doyle, 2017. "The First 2,000 Days and Child Skills: Evidence from a Randomized Experiment of Home Visiting," Working Papers 201715, School of Economics, University College Dublin.
    3. Arnaud Chevalier & Olivier Marie, 2017. "Economic Uncertainty, Parental Selection, and Children’s Educational Outcomes," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 393-430.
    4. Liu, Chang & Eriksson, Tor & Yi, Fujin, 2021. "Offspring migration and nutritional status of left-behind older adults in rural China," Economics & Human Biology, Elsevier, vol. 41(C).
    5. Orla Doyle & Nick Fitzpatrick & Judy Lovett & Caroline Rawdon, 2015. "Early intervention and child health: Evidence from a Dublin-based randomized controlled trial," Working Papers 201505, Geary Institute, University College Dublin.
    6. Ukaj MIC & Mustafa Topxhiu RAHMIJE, 2019. "The returns to investment in education: Some theoretical and empirical insights," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 193-203.
    7. Carneiro, Pedro & Galasso, Emanuela & Lopez Garcia, Italo & Bedregal, Paula & Cordero, Miguel, 2019. "Parental Beliefs, Investments, and Child Development: Evidence from a Large-Scale Experiment," IZA Discussion Papers 12506, Institute of Labor Economics (IZA).
    8. Sammy Zahran & Terrence Iverson & Shawn P. McElmurry & Stephan Weiler, 2017. "The Effect of Leaded Aviation Gasoline on Blood Lead in Children," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 575-610.
    9. Orla Doyle, 2024. "Can Early Intervention Have a Sustained Effect on Human Capital?," Journal of Human Resources, University of Wisconsin Press, vol. 59(5), pages 1599-1636.
    10. Sandner, Malte, 2013. "Effects of Early Childhood Intervention on Child Development and Early Skill Formation. Evidence from a Randomized Controlled Trial," Hannover Economic Papers (HEP) dp-518, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    11. Michelangelo Landgrave, 2023. "Why Do Migrant Parents Give Their Children Distinctively Ethnic Names? Evidence from a Pre-registered Analysis," Journal of Economics, Race, and Policy, Springer, vol. 6(1), pages 19-33, March.
    12. Doyle, Orla & Fitzpatrick, Nick & Lovett, Judy & Rawdon, Caroline, 2015. "Early intervention and child physical health: Evidence from a Dublin-based randomized controlled trial," Economics & Human Biology, Elsevier, vol. 19(C), pages 224-245.
    13. Cortés, Darwin & Maldonado, Darío & Gallego, Juan & Charpak, Nathalie & Tessier, Rejean & Ruiz, Juan Gabriel & Hernandez, José Tiberio & Uriza, Felipe & Pico, Julieth, 2022. "Comparing long-term educational effects of two early childhood health interventions," Journal of Health Economics, Elsevier, vol. 86(C).
    14. Clara E. Piano, 2022. "The family and the state: a public choice perspective," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(3), pages 383-405, September.

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    More about this item

    Keywords

    early childhood intervention; human capital development; randomized control trial; multiple hypotheses; permutation testing;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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