A Comprehensive Approach to Skills-Oriented Social Policy: E ffi cient Redistribution to Promote Mobility Within and Across Generations Heckman Social Mobility
Modern Approach Recognizes: (1) Fundamental importance of skills in modern economies (2) Multiplicity of skills (3) The multiple sources producing skills (a) Schools (b) Families (c) Neighborhoods and peers (d) Firms (4) The importance of supporting and incentivizing all of these sources of skill (5) Recent knowledge on e ff ective targeting of skills (6) Great need for evaluations accounting for costs and benefits measured in terms of social opportunity costs Heckman Social Mobility
A Skills-based Policy Tackles Many Aspects of Poverty, Inequality, and Social Mobility A Unified Approach to Policy Heckman Social Mobility
Avoids Fragmented Solutions • Current policy discussions have a fragmented quality. Heckman Social Mobility
Solves Problems As They Arise “The Squeaky Wheel Gets the Grease” Heckman Social Mobility
Is Prevention E ffi cient? How Well Can We Target? Heckman Social Mobility
Evidence on the E ff ectiveness of Early Targeting to Promote Skills (Including Character Skills) • 80% of adult social problems regarding health, healthy behaviors, crime and poverty are due to 20% of the population. • Reliable indicators of these problems by age 5 (Caspi et al., 2016). Heckman Social Mobility
Childhood Forecasting of a Small Segment of the Population with Large Economic Burden Caspi, Moffitt, et al. (2017) Nature Human Behaviour Heckman Social Mobility
The Pareto Principle 20% of the Actors Account for 80% of the Results. Vilfredo Pareto, 1848-1923 Heckman Social Mobility
Social Welfare Benefit Months 20% of Cohort Members = 80% of Total Social Welfare Benefit Months Heckman Social Mobility
Link to Additional Caspi et al. Slides Heckman Social Mobility
The High-need/High-cost Group in 3 or more sectors: How many health/social services do they use? Heckman Social Mobility
Small Footprint of cohort members never in any high-cost group: Heckman Social Mobility
Childhood Risk Factors to Describe High-cost Actor Groups: Composites across ages 3, 5, 7, 9, 11 • IQ • Self-control • SES (socio-economic status) • Maltreatment Heckman Social Mobility
Adam Smith Wrong: People at Age 8 Are Vastly Di ff erent in Skills Heckman Social Mobility
Summary of findings • 20% of people contribute 80% of social/health problems. • A high-need/high-cost population segment uses ~half of resources in multiple sectors. • Most high-need/high-cost people in this segment share risk factors in the first decade of life; • Prediction is stronger than thought; AUC approaches .90. • Brain integrity in the first years of life is important. Seen in this way, early-life risks seem important enough to warrant investment in early-years preventions. Heckman Social Mobility
Exploit Understanding That Skill Deficits Are An Important Source of Many Social Problems Heckman Social Mobility
Skill Development Heckman Social Mobility
The Importance of Cognition and Character Heckman Social Mobility
(a) Major advances have occurred in understanding which human capacities matter for success in life. (b) Cognitive ability as measured by IQ and achievement tests is important. (c) So are the socio-emotional skills – sometimes called character traits or personality traits: • Motivation • Self Regulation • Sociability; ability to work • Self Esteem with others • Ability to defer gratification • Attention • Health and Mental Health Heckman Social Mobility
• Beyond PISA scores Heckman Social Mobility
Heckman Social Mobility
Link to Report PDF http://tinyurl.com/OECD-Report-2014 Heckman Social Mobility
Cognitive and Socioemotional Skills Determine: (a) Crime (b) Earnings (c) Health and healthy behaviors (d) Civic participation (e) Educational attainment (f) Teenage pregnancy (g) Trust (h) Human agency and self-esteem Heckman Social Mobility
Skill Gaps Open Up Early • Gaps in skills across socioeconomic groups open up very early: • Persist strongly for cognitive skills • Less strongly for noncognitive skills • Skills are not set in stone at birth—but they solidify as people age. They have genetic components. • Skills evolve and can be shaped in substantial part by investments and environments. Heckman Social Mobility
Figure 14: Mean Achievement Test Scores by Age by Maternal Education Dropout Source: Brodsky, Gunn et al. Heckman Social Mobility
Figure 15: Gaps throughout life, by mother’s level of education, Denmark Selvregulering og samarbejde efter mors uddannelse 9 Selvregulering og samarbejde (gns.) 8.5 8 7.5 7 6.5 3,0 3,5 4,0 4,5 5,0 5,5 Alder (halve år) Ingen Erhvervsfag. Videregående Age: 0 yrs 0 yrs 3–5 yrs Outcome: Birth weight Not admitted to Score for self- neo-natal ward regulation Unit: Gram Fraction Rating Heckman Social Mobility
Figure 15: Gaps throughout life, by mother’s level of education, Denmark, Cont’d Age: 8–14 yrs 25 yrs 30 yrs Test scores, Danish No criminal Years of Outcome: in national tests conviction schooling Unit: Test score Fraction Years Heckman Social Mobility
Figure 15: Gaps throughout life, by mother’s level of education, Denmark, Cont’d Age: 40 yrs 40–50 yrs 54 yrs 60 yrs Outcome: Wage earnings Not contacted In the labor Alive a hospital force 1.000DKK Fraction Fraction Fraction Unit: Heckman Social Mobility
How to Interpret This Evidence • Evidence on the early emergence of gaps leaves open the question of which aspects of families are responsible for producing these gaps. • Genes? Eugenics? • Parenting and family investment decisions? • Family environments? Neighborhood, peer, and sorting e ff ects? • The evidence from a large body of research demonstrates an important role for investments and family and community environments in determining adult capacities above and beyond the role of the family in transmitting genes. • The quality of home environments by family type is highly predictive of child success. • Home environments can be strengthened in a voluntary fashion. Heckman Social Mobility
Genes, Biological Embedding of Experience, and Gene-Environment Interactions Heckman Social Mobility
Genes Do Not Explain Time Series Trends or Intercountry Di ff erences Heckman Social Mobility
Link to Image of DNA Methylation Heckman Social Mobility
Family Environments and Child Outcomes Heckman Social Mobility
Hart & Risley, 1995 • In the USA, children enter school with “meaningful di ff erences” in vocabulary knowledge. 1. Emergence of the Problem In a typical hour, the average child hears: Family Actual Di ff erences in Quantity Actual Di ff erences in Quality Status of Words Heard of Words Heard Welfare 616 words 5 a ffi rmatives, 11 prohibitions Working Class 1,251 words 12 a ffi rmatives, 7 prohibitions Professional 2,153 words 32 a ffi rmatives, 5 prohibitions 2. Cumulative Vocabulary at Age 3 Cumulative Vocabulary at Age 3 Children from welfare families: 500 words Children from working class families: 700 words Children from professional families: 1,100 words Heckman Social Mobility
Child Home Environments are Compromised: A Growing Trend World-wide Heckman Social Mobility
Figure 16: Children Under 18 Living in Single Parent Households by Marital Status of Parent Note : Parents are defined as the head of the household. Children are defined as individuals under 18, living in the household, and the child of the head of household. Children who have been married or are not living with their parents are excluded from the calculation. Separated parents are included in “Married, Spouse Absent” Category. Source : IPUMS March CPS 1976-2016. Heckman Social Mobility
Figure 17: Proportion of Live Births Outside Marriage 60 50 40 30 20 10 0 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 United Kingdom United States Scot l an d Source : Eurostat, CDC and National record of Scotland. Heckman Social Mobility
Figure 18: Share of births outside of marriage, 1970 a , 1990 b and 2014 or latest available year c — Proportion (%) of all births where the mother’s marital status at the time of birth is other than married b 2014 1995 1970 % 100 90 80 70 60 50 40 30 20 10 0 Source: OECD Family Database Heckman Social Mobility
Consequences of Cohabitation Heckman Social Mobility
Figure 19: Self-Regulation and Cooperation by Family Status Source: ’Daycare of the Future’, Bleses and Jensen (2017) Heckman Social Mobility
Figure 20: Vocabulary by Family Status Source: ’Daycare of the Future’, Bleses and Jensen (2017) Heckman Social Mobility
Link to Additional Figures Heckman Social Mobility
Figure 21: Empathy by Family Status Source: ’Daycare of the Future’, Bleses and Jensen (2017) Heckman Social Mobility
These Relationships Remain Strong Even After Controlling for Parental Income and Education and Other Measures of Skills Heckman Social Mobility
Link to Additional Figures (Children from Denmark) Heckman Social Mobility
Is Family Influence Just About Money? Heckman Social Mobility
Alms to the Poor? The Traditional Approach Heckman Social Mobility
Great Society Programs Tried This to End Intergenerational Poverty Heckman Social Mobility
Figure 22: Trends in the Intergenerational Correlation of Welfare Participation 0.50 0.45 0.40 Intergenerational Elasticity 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year Source: Hartley et al. 2016 Note: Welfare participation includes AFDC/TANF, SSI, Food Stamps and Other Welfare. Heckman Social Mobility
Welfare Subsidized Poverty Enclaves – Detached The Poor from Society Heckman Social Mobility
The Dynamics of Skill Formation: Two Notions of Complementarity Heckman Social Mobility
Static Complementarity • The productivity of investment greater for the more capable. • High returns for more capable people: Matthew E ff ect • Does this justify social Darwinism? • On grounds of economic e ffi ciency, should we invest primarily in the most capable? • Answer: It depends on where in the stage of the life cycle we consider the investment. Heckman Social Mobility
Dynamic Complementarity • If we invest today in the base capabilities of disadvantaged young children, there is a huge return. • Makes downstream investment more productive. • No necessary tradeo ff between equality and e ffi ciency goals . • Augmenting this investment by public infrastructure and schools gives agency to people and enhances economic and social functioning. Heckman Social Mobility
• Both processes are at work. • No necessary contradiction. • Investing early creates the skill base that makes later investment productive. • E ff ective targeting. Heckman Social Mobility
Skills Beget Skills Social-emotional Skills Cognitive Skills, Health (sit still; pay attention; engage in learning; open to experience) Health Cognitive Skills, Noncognitive Skills (fewer lost school days; ability to concentrate) Cognitive Skills Produce better health practices; produce more motivation; greater perception of rewards. (child better understands and controls its environment) Outcomes: increased productivity, higher income, better health, more family investment, upward mobility, reduced social costs. Heckman Social Mobility
Figure 23: Life Cycle Developmental Framework Parental and Prenatal Parental Governmental Prenatal Fetal Endowments PRENATAL Environments Investment Childhood Skills Perinatal Parental (personality, cognition, BIRTH Environments and health) Investment: Parenting and Preschool Parental EARLY Skills Environments CHILDHOOD 0-3 Parenting and Preschool LATER Skills Parental, Social, and CHILDHOOD Economic Environments Parenting, Schooling, and Workplace OJT Adult Skills ADULTHOOD Family and Economic Adult Education and Environments Workplace OJT Adult Skill ADULTHOOD Heckman Social Mobility
Modern Understanding of the Dynamics of Skill Formation Causes Us to Rethink Traditional Distinctions in Philosophy and Political Science Heckman Social Mobility
Raises Question of How and When Merit Acquired? Merit vs. Chance vs. E ff ort Distinctions Currently Used in Philosophy and Political Science Literature Are Without Much Empirical Content Heckman Social Mobility
50% of Inequality in Lifetime Earnings Due to Factors in Place by Age 18 Cunha et al. (2005) • John Roemer (2017) Reports a Similar Estimate Heckman Social Mobility
Powerful Evidence For E ff ectiveness of Targeted Interventions Across the Life Cycle • Contradicts The Eugenics Argument Heckman Social Mobility
Perry Preschool Project Heckman Social Mobility
Starts at Age 3 2 hrs a Day – Two Years 10% Rate of Return Per Dollar Invested Heckman Social Mobility
Enriches Home Lives of Children Outside of Childcare Center Keeps Parental Engagement Active Long After the Children Leave Pre-K Heckman Social Mobility
Parental response to Perry Preschool Program after 1 year experience of treatment: 60 50 Proportion 40 30 20 10 − .015 − .01 − .005 0 .005 .01 .015 Belief in Importance of Parenting Control Treatment Heckman Social Mobility
Intergenerational E ff ects of Perry Program Heckman Social Mobility
Selected Outcomes for All Children of the Perry Participants 1 Participant-level average of children's outcomes 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Completed In good Employed Never Never high school health full-time suspended arrested P .0849 P .0624 P .0548 P .0347 P .0792 Control group's mean Treatment effect (difference-in-means) P: Worst-case randomization test-based exact p-value Heckman Social Mobility
Selected Outcomes for All Children of the Male Participants 1 Participant-level average of children's outcomes 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Never Never suspended arrested P .0290 P .0459 Control group's mean Treatment effect (difference-in-means) P: Worst-case randomization test-based exact p-value Heckman Social Mobility
Selected Outcomes for Male Children of the Perry Participants 1 Participant-level average of children's outcomes 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Attended In good Never Never college health suspended arrested P .0085 P .0464 P .0546 P .0887 Control group's mean Treatment effect (difference-in-means) P: Worst-case randomization test-based exact p-value Heckman Social Mobility
Selected Outcomes for Male Children of the Male Participants 1 Participant-level average of children's outcomes 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Completed In good Never college health arrested P .0454 P .0207 P .0558 Control group's mean Treatment effect (difference-in-means) P: Worst-case randomization test-based exact p-value Heckman Social Mobility
Selected Outcomes for Male Children of the Female Participants 1 Participant-level average of children's outcomes 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Attended Never college suspended P .0205 P .0593 Control group's mean Treatment effect (difference-in-means) P: Worst-case randomization test-based exact p-value Heckman Social Mobility
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