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

TitleIntergenerational Long-Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model
Publication TypeJournal Article
AuthorsHeckman, J. J., and L. K. Raut
This paper formulates a structural dynamic programming model of preschool investment choices of altruistic parents and then empirically estimates the structural parameters of the model using the NLSY79 data. The paper finds that preschool investment significantly boosts cognitive and non-cognitive skills, which enhance earnings and school outcomes. It also finds that a standard Mincer earnings function, by omitting measures of non-cognitive skills on the right-hand side, overestimates the rate of return to schooling. From the estimated equilibrium Markov process, the paper studies the nature of within generation earnings distribution, intergenerational earnings mobility, and schooling mobility. The paper finds that a tax-financed free preschool program for the children of poor socioeconomic status generates positive net gains to the society in terms of average earnings, higher intergenerational earnings mobility, and schooling mobility.
Title Intergenerational Long-Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model
Publication Title J Econom
Publication Type Journal Article
Published Year 2016
Authors J.J. Heckman; L.K. Raut
Edition 2015/12/29
Accession Number 26709326
Number 1
ISBN Number 0304-4076 (Print)<br/>0304-4076
Grant List
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