Intergenerational Long Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model

33 Pages Posted: 16 Feb 2010

See all articles by James J. Heckman

James J. Heckman

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Lakshmi K. Raut

U.S. Social Security Administration

Multiple version iconThere are 3 versions of this paper

Date Written: December 23, 2009

Abstract

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

Heckman, James J. and Raut, Lakshmi K., Intergenerational Long Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model (December 23, 2009). Available at SSRN: https://ssrn.com/abstract=1552163 or http://dx.doi.org/10.2139/ssrn.1552163

James J. Heckman

University of Chicago - Department of Economics ( email )

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Lakshmi K. Raut (Contact Author)

U.S. Social Security Administration ( email )

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