Estimating the Technology of Cognitive and Noncognitive Skill Formation

By Flávio Cunha, James J. Heckman, Susanne M. Schennach. 2010

2,390 citations recorded by the source corpus.

This paper formulates and estimates multistage production functions for child cognitive and noncognitive skills. Output is determined by parental environments and investments at different stages of childhood. We estimate the elasticity of substitution between investments in one period and stocks of skills in that period to assess the benefits of early investment in children compared to later remediation. We establish nonparametric identification of a general class of nonlinear factor models. A by-product of our approach is a framework for evaluating childhood interventions that does not rely on arbitrarily scaled test scores as outputs and recognizes the differential effects of skills in different tasks. Using the estimated technology, we determine optimal targeting of interventions to children with different parental and personal birth endowments. Substitutability decreases in later stages of the life cycle for the production of cognitive skills. It increases in later stages of the life cycle for the production of noncognitive skills. This finding has important implications for the design of policies that target the disadvantaged. For some configurations of disadvantage and outcomes, it is optimal to invest relatively more in the later stages of childhood.

Subfields: Education, Sociology and Political Science

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Citations in the corpus

Credit Constraints in Education (2011, positive): “The estimates of Cunha, Heckman, and Schennach (2010) suggest that investments are quite complementary over time, with the degree of complementarity growing with age for cognitive skills.19 They find that it is optimal to invest relatively more in young children with investment declining with age.”
Early Life Circumstance and Adult Mental Health (2019, background): “Our focus on psychological well-being is related to a growing literature on thedeterminants of personality andnoncognitive skill formation (Heckman 2007; Cunha, Heckman, and Schennach 2010).”
FINANCIAL LITERACY, FINANCIAL EDUCATION AND ECONOMIC OUTCOMES (2012, neutral): “Other unobserved factors such as personality (Borghans et al. 2008) and family background (Cunha & Heckman 2007, Cunha et al. 2010) 358 Hastings Madrian Skimmyhorn A nn u.”