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

90 Pages Posted: 10 Aug 2013

See all articles by Orla Doyle

Orla Doyle

University College Dublin - Geary Institute

Colm P. Harmon

The University of Sydney - School of Economics; IZA Institute of Labor Economics

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)

Caitriona Logue

University College Dublin (UCD)

Seong Moon

University of Chicago - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 2013

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 and Harmon, Colm P. and Heckman, James J. and Logue, Caitriona and Moon, Seong, Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes (August 2013). NBER Working Paper No. w19316. Available at SSRN: https://ssrn.com/abstract=2308284

Orla Doyle (Contact Author)

University College Dublin - Geary Institute ( email )

Dublin 4, 4
Ireland

Colm P. Harmon

The University of Sydney - School of Economics ( email )

Rm 370 Merewether (H04)
Sydney, NSW 2006 2008
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

James J. Heckman

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States
773-702-0634 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

American Bar Foundation

750 N. Lake Shore Drive
Chicago, IL 60611
United States

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Caitriona Logue

University College Dublin (UCD)

Seong Moon

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

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