Intergenerational Long Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model
33 Pages Posted: 16 Feb 2010
Date Written: December 23, 2009
Using the NLSY79 and the NLSY79 Children and Young Adults datasets, this paper formulates, provides conditions for parametric and non-parametric identification and empirically estimates the parameters of an altruistic model of parental preschool investment within a structural dynamic programming framework. It then examines the effect of a publicly provided preschool policy to disadvantaged children on their educational and labor market achievements, and also on the inter-generational long-term effects on social mobility, college mobility, and earnings inequality. The paper calculates the tax burden of such a social contract policy, taking into account these intra- and inter-generational effects.
Keywords: Preschool Investment, Early Childhood Development, Intergenerational Social Mobility, Structural Dynamic Programming
JEL Classification: J24, J62, O15, I21
Suggested Citation: Suggested Citation