Policies to Foster Human Capital

77 Pages Posted: 29 Apr 2000 Last revised: 28 Jun 2000

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)

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Date Written: August 1999

Abstract

This paper considers the sources of skill formation in a modern economy and emphasizes the importance of both cognitive and noncognitive skills in producing economic and social success and the importance of both formal academic institutions and families and firms as sources of learning. Skill formation is a dynamic process with strong synergistic components. Skill begets skill. Early investment promotes later investment. Noncognitive skills and motivation are important determinants of success and these can be improved more successfully and at later ages than basic cognitive skills. Methods currently used to evaluate educational interventions ignore these noncogntive skills and therefore substantially understate the benefits of early intervention programs and mentoring and teenage motivation programs. At current levels of investment, American society underinvests in the very young and overinvests in mature adults with low skills.

Suggested Citation

Heckman, James J., Policies to Foster Human Capital (August 1999). NBER Working Paper No. w7288. Available at SSRN: https://ssrn.com/abstract=198970

James J. Heckman (Contact Author)

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