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Author: cunha, flavio
Resulting in 13 citations.
1. Carneiro, Pedro M.
Cunha, Flavio
Heckman, James J.
Technology of Skill Formation
Presented: Florence, Italy, Society for Economic Dynamics Annual Meeting, Villa La Pietra, July 1-3, 2004
Cohort(s): Children of the NLSY79, NLSY79
Publisher: Society for Economic Dynamics
Keyword(s): Child Development; Human Capital; I.Q.; Life Cycle Research; Skill Formation

Permission to reprint the abstract has not been received from the publisher.

This paper presents formal models of child development that capture the essence of recent findings from the empirical literature on child development. The goal is to provide theoretical frameworks for interpreting the evidence from a vast empirical literature, for guiding the next generation of empirical studies and for formulating policy. We start from the premise that skill formation is a life-cycle process. It starts in the womb and goes on throughout most of the adult life. Families and firms have a role in this process that is at least as important as the role of schools. There are multiple skills and multiple abilities that are important for adult success. Abilities are both inherited and created, and the traditional debate of nature versus nurture is outdated and scientifically obsolete. The technology of skill formation has two additional important characteristics. The first one is that IQ and behavior are more plastic at early ages than at later ages. Furthermore, behavior is much more malleable than IQ as individuals age. The second is that human capital investments are complementary over time. Early investments increase the productivity of later investments. Early investments are not productive if they are not followed up by later investments. The returns to investing early in the life cycle are high. Remediation of inadequate early investments is difficult and very costly.
Bibliography Citation
Carneiro, Pedro M., Flavio Cunha and James J. Heckman. "Technology of Skill Formation." Presented: Florence, Italy, Society for Economic Dynamics Annual Meeting, Villa La Pietra, July 1-3, 2004.
2. Cunha, Flavio
A Time to Plant and a Time to Reap
Working Paper, Department of Economics, University of Chicago, January 2007
Cohort(s): Children of the NLSY79, NLSY79
Publisher: Department of Economics, University of Chicago
Keyword(s): Armed Forces Qualifications Test (AFQT); Child Development; Family Income; Home Observation for Measurement of Environment (HOME); I.Q.; Intergenerational Patterns/Transmission; Panel Study of Income Dynamics (PSID); Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Peabody Picture Vocabulary Test (PPVT); Skill Formation; Skills; Welfare

Permission to reprint the abstract has not been received from the publisher.

This paper formulates, identifies, and estimates a multistage model of the production of ability in childhood. The model is based on two features. First, Investments made at different ages of the child are not forced to be perfect substitutes as has been assumed in the previous literature. In the model and in the estimation, I allow the technology to vary according to childhood developmental stages so I can capture the notion of critical and sensitive periods found in the literature of animal and human development. I find evidence for sensitive periods. Second, Parents are subject to lifetime credit constraints. They cannot leave debts to their children. They also face uninsurable productivity shocks in labor income. These market failures distort the equilibrium allocation of investments in the cognitive development of their children. The model's empirically grounded steady-state equilibrium explains a variety of facts about cognitive ability, education, and child development. It correctly predicts selection into college by quartiles of family income and terciles of ability measured at adolescent years. It is consistent with gaps in cognitive ability that are present at very early ages. It reproduces the pattern of selection into college based on cognitive ability. I use the model to evaluate the impact of different remediation policies on the stationary distribution of cognitive ability and welfare. I analyze the effects of a 50% tuition subsidy, a targeted early investment subsidy, and a targeted early and late investment subsidy that is contingent on parental resources. I show that the policy that subsidizes early and late childhood investments dominates the other policies in welfare, since it is the one that generates the highest equivalent variation across all deciles of permanent income. It also generates a stationary distribution of cognitive ability that first-order stochastically dominates the ones generated by the baseline economy and the other remediation policies.
Bibliography Citation
Cunha, Flavio. "A Time to Plant and a Time to Reap." Working Paper, Department of Economics, University of Chicago, January 2007.
3. Cunha, Flavio
Heckman, James J.
Decomposing Trends in Inequality in Earnings into Forecastable and Uncertain Components
Journal of Labor Economics 34,S2 (April 2016): S31–S65.
Also: http://www.journals.uchicago.edu/doi/abs/10.1086/684121
Cohort(s): NLSY79, Young Men
Publisher: University of Chicago Press
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Earnings; Educational Attainment; Skilled Workers; Test Scores/Test theory/IRT; Wage Differentials

A substantial empirical literature documents the rise in wage inequality in the American economy. It is silent on whether the increase in inequality is due to components of earnings that are predictable by agents or whether it is due to greater uncertainty facing them. These two sources of variability have different consequences for both aggregate and individual welfare. Using data on two cohorts of American males, we find that a large component of the rise in inequality for less skilled workers is due to uncertainty. For skilled workers, the rise is less pronounced.
Bibliography Citation
Cunha, Flavio and James J. Heckman. "Decomposing Trends in Inequality in Earnings into Forecastable and Uncertain Components." Journal of Labor Economics 34,S2 (April 2016): S31–S65. A.
4. Cunha, Flavio
Heckman, James J.
Economics and Psychology of Inequality and Human Development
NBER Working Paper No. 14695, National Bureau of Economic Research, January 2009.
Cohort(s): Children of the NLSY79, NLSY79
Publisher: National Bureau of Economic Research (NBER)
Keyword(s): Achievement; Cognitive Development; Family Influences; Mothers, Education; Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Skill Formation

Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.
Bibliography Citation
Cunha, Flavio and James J. Heckman. "Economics and Psychology of Inequality and Human Development." NBER Working Paper No. 14695, National Bureau of Economic Research, January 2009.
5. Cunha, Flavio
Heckman, James J.
Economics and Psychology of Inequality and Human Development
Journal of the European Economic Association 7,2-3 (April 2009): 320-364
Cohort(s): Children of the NLSY79, NLSY79
Publisher: MIT Press
Keyword(s): Achievement; Cognitive Development; Family Influences; Mothers, Education; Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Skill Formation

Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.
Bibliography Citation
Cunha, Flavio and James J. Heckman. "Economics and Psychology of Inequality and Human Development." Journal of the European Economic Association 7,2-3 (April 2009): 320-364 .
6. Cunha, Flavio
Heckman, James J.
Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation
Working Paper, University of Chicago, April 30, 2006.
Cohort(s): Children of the NLSY79, NLSY79
Publisher: Department of Economics, University of Chicago
Keyword(s): Armed Forces Qualifications Test (AFQT); Armed Services Vocational Aptitude Battery (ASVAB); Behavior Problems Index (BPI); Child Development; Home Observation for Measurement of Environment (HOME); Human Capital; I.Q.; Intergenerational Patterns/Transmission; Life Cycle Research; Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Skill Formation; Skills

Permission to reprint the abstract has not been received from the publisher.

This paper formulates and estimates models of the evolution of cognitive and noncognitive skills over the life cycle of children and explores the role of family environments in shaping these skills at different stages of the life cycle. Central to this analysis is the identification of the technology of human skill formation. We estimate a dynamic factor model to solve the problem of endogeneity of inputs and multiplicity of inputs relative to instruments. We identify the scale of the factors by estimating their effects on adult earnings. In this fashion we avoid reliance on test scores and changes in test scores that have no natural metric. Parental investments are more effective in raising noncognitive skills. Noncognitive skills promote the formation of cognitive skills (but not vice versa). Parental inputs have different effects at different stages of the child's life cycle with cognitive skills affected more at early ages and noncognitive skills affected more at later ages.
Bibliography Citation
Cunha, Flavio and James J. Heckman. "Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation." Working Paper, University of Chicago, April 30, 2006..
7. Cunha, Flavio
Heckman, James J.
Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation
Presented: Ann Arbor, MI, The Long-Run Impact of Early Life Events, A Workshop Sponsored by the National Poverty Center, December 13-14, 2007
Cohort(s): Children of the NLSY79, NLSY79
Publisher: National Poverty Center
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Behavior Problems Index (BPI); Child Development; Home Observation for Measurement of Environment (HOME); Human Capital; I.Q.; Intergenerational Patterns/Transmission; Life Cycle Research; Mothers, Education; Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Skill Formation; Skills

Permission to reprint the abstract has not been received from the publisher.

This paper estimates models of the evolution of cognitive and noncognitive skills and explores the role of family environments in shaping these skills at different stages of the life cycle of the child. Central to this analysis is identification of the technology of skill formation. We estimate a dynamic factor model to solve the problem of endogeneity of inputs and multiplicity of inputs relative to instruments. We identify the scale of the factors by estimating their effects on adult outcomes. In this fashion we avoid reliance on test scores and changes in test scores that have no natural metric. Parental investments are generally more effective in raising noncognitive skills. Noncognitive skills promote the formation of cognitive skills but, in most specifications of our model, cognitive skills do not promote the formation of noncognitive skills. Parental inputs have different effects at different stages of the child's life cycle with cognitive skills affected more at early ages and noncognitive skills affected more at later ages.
Bibliography Citation
Cunha, Flavio and James J. Heckman. "Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation." Presented: Ann Arbor, MI, The Long-Run Impact of Early Life Events, A Workshop Sponsored by the National Poverty Center, December 13-14, 2007.
8. Cunha, Flavio
Heckman, James J.
Formulating, Identifying, and Estimating the Technology of Cognitive and Noncognitive Skill Formation
The Journal of Human Resources 43,4 (Fall 2008): 738-782.
Also: http://jhr.uwpress.org/content/43/4/738.abstract
Cohort(s): Children of the NLSY79, NLSY79
Publisher: University of Wisconsin Press
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Behavior Problems Index (BPI); Child Development; Family Income; Home Observation for Measurement of Environment (HOME); Human Capital; I.Q.; Intergenerational Patterns/Transmission; Life Cycle Research; Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Skill Formation; Skills

This paper estimates models of the evolution of cognitive and noncognitive skills and explores the role of family environments in shaping these skills at different stages of the life cycle of the child. Central to this analysis is identification of the technology of skill formation. We estimate a dynamic factor model to solve the problem of endogeneity of inputs and multiplicity of inputs relative to instruments. We identify the scale of the factors by estimating their effects on adult outcomes. In this fashion we avoid reliance on test scores and changes in test scores that have no natural metric. Parental investments are generally more effective in raising noncognitive skills. Noncognitive skills promote the formation of cognitive skills but, in most specifications of our model, cognitive skills do not promote the formation of noncognitive skills. Parental inputs have different effects at different stages of the child's life cycle with cognitive skills affected more at early ages and noncognitive skills affected more at later ages.
Bibliography Citation
Cunha, Flavio and James J. Heckman. "Formulating, Identifying, and Estimating the Technology of Cognitive and Noncognitive Skill Formation." The Journal of Human Resources 43,4 (Fall 2008): 738-782.
9. Cunha, Flavio
Heckman, James J.
The Evolution of Cognitive and Noncognitive Skills Over the Life Cycle of the Child
Presented: Chicago, IL, American Economic Association Meetings, January 2007.
Also: http://jenni.uchicago.edu/papers/Dugger/evo-cognon_ho_2007-01-03a_mms.pdf
Cohort(s): Children of the NLSY79
Publisher: American Economic Association
Keyword(s): Armed Forces Qualifications Test (AFQT); Armed Services Vocational Aptitude Battery (ASVAB); Behavior Problems Index (BPI); Child Development; Home Observation for Measurement of Environment (HOME); Human Capital; I.Q.; Intergenerational Patterns/Transmission; Life Cycle Research; Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Pearlin Mastery Scale; Skill Formation; Skills

Permission to reprint the abstract has not been received from the publisher.

This paper uses simple economic models of skill formation to organize a large body of evidence on the development of skills in children in economics, psychology, education and neuroscience.

Summary:

  • Cognitive and noncognitive skills evolve over the life cycle of the child. The correlation across these skills increases with age.
  • Noncognitive skills foster the accumulation of cognitive skills.
  • Family environments and investments causally affect both cognitive and noncognitive skills.
  • Investments are more effective for cognitive skills in the early years.
  • They are more effective in the later years for noncognitive skills.
  • Strong evidence of self-productivity and cross self-productivity.
Bibliography Citation
Cunha, Flavio and James J. Heckman. "The Evolution of Cognitive and Noncognitive Skills Over the Life Cycle of the Child." Presented: Chicago, IL, American Economic Association Meetings, January 2007.
10. Cunha, Flavio
Heckman, James J.
Schennach, Susanne
Estimating the Technology of Cognitive and Noncognitive Skill Formation
NBER Working Paper No. 15664, National Bureau of Economic Research, February 2010.
Also: http://www.nber.org/papers/w15664
Cohort(s): Children of the NLSY79, NLSY79
Publisher: National Bureau of Economic Research (NBER)
Keyword(s): Armed Forces Qualifications Test (AFQT); Armed Services Vocational Aptitude Battery (ASVAB); Behavior Problems Index (BPI); Home Observation for Measurement of Environment (HOME); Motor and Social Development (MSD); Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Peabody Picture Vocabulary Test (PPVT); Rosenberg Self-Esteem Scale (RSES) (see Self-Esteem); Rotter Scale (see Locus of Control); Temperament

This paper formulates and estimates multistage production functions for children's cognitive and noncognitive skills. Skills are 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 production technologies based on nonlinear factor models with endogenous inputs. A by-product of our approach is a framework for evaluating childhood and schooling interventions that does not rely on arbitrarily scaled test scores as outputs and recognizes the differential effects of the same bundle 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 in the production of cognitive skills. It is roughly constant across stages of the life cycle in the production of noncognitive skills. This finding has important implications for the design of policies that target the disadvantaged. For most configurations of disadvantage, our estimates imply that it is optimal to invest relatively more in the early stages of childhood than in later stages.
Bibliography Citation
Cunha, Flavio, James J. Heckman and Susanne Schennach. "Estimating the Technology of Cognitive and Noncognitive Skill Formation." NBER Working Paper No. 15664, National Bureau of Economic Research, February 2010.
11. Cunha, Flavio
Heckman, James J.
Schennach, Susanne
Estimating the Technology of Cognitive and Noncognitive Skill Formation
Econometrica 78,3 (1 May 2010): 883–931.
Also: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2885826/
Cohort(s): Children of the NLSY79, NLSY79
Publisher: Blackwell Publishing, Inc. => Wiley Online
Keyword(s): Armed Forces Qualifications Test (AFQT); Armed Services Vocational Aptitude Battery (ASVAB); Behavior Problems Index (BPI); Home Observation for Measurement of Environment (HOME); Life Cycle Research; Motor and Social Development (MSD); Parental Influences; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Peabody Picture Vocabulary Test (PPVT); Rosenberg Self-Esteem Scale (RSES) (see Self-Esteem); Rotter Scale (see Locus of Control); Skill Depreciation; Skill Formation; Temperament

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.
Bibliography Citation
Cunha, Flavio, James J. Heckman and Susanne Schennach. "Estimating the Technology of Cognitive and Noncognitive Skill Formation." Econometrica 78,3 (1 May 2010): 883–931. A.
12. Cunha, Flavio
Karahan, Fatih
Soares, Ilton
Returns to Skills and the College Premium
Journal of Money, Credit and Banking 43,s1 (August 2011): 39-86.
Also: http://onlinelibrary.wiley.com/doi/10.1111/j.1538-4616.2011.00410.x/full
Cohort(s): NLSY79
Publisher: Wiley Online
Keyword(s): Cognitive Ability; College Education; High School; Panel Study of Income Dynamics (PSID); Skills

Permission to reprint the abstract has not been received from the publisher.

A substantial literature documents the evolution of the college premium in the U.S. labor market over the last 40 years or so. There are at least three different interpretations of this fact: (i) shifts in the relative supply of and demand for college versus high school labor, (ii) shifts in the relative supply of and demand for skills in the college versus high school sector, and (iii) composition effects. We investigate how each of these components contributes to the dynamics of the college premium and find that all three play a role, but the increase in the college premium is primarily driven by the first component. We also find that during the 1980s, the college premium for high school workers diverged from the college premium for college workers and a substantial fraction of the gap that opens up is primarily due to the increase in the returns to cognitive skills
Bibliography Citation
Cunha, Flavio, Fatih Karahan and Ilton Soares. "Returns to Skills and the College Premium." Journal of Money, Credit and Banking 43,s1 (August 2011): 39-86.
13. Heckman, James J.
Cunha, Flavio
Investing in Our Young People
Working Paper, University of Chicago, November 2006.
Also: http://www-news.uchicago.edu/releases/06/061115.education.pdf
Cohort(s): Children of the NLSY79
Publisher: University of Chicago
Keyword(s): Behavior Problems Index (BPI); Cognitive Development; Family Influences; Family Resources; Family Studies; Home Observation for Measurement of Environment (HOME); Motor and Social Development (MSD); Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Racial Differences; Temperament

Permission to reprint the abstract has not been received from the publisher.

An econometric analysis of data from the landmark National Longitudinal Study of Youth, 1979 (NLSY79) to determine the most effective way to invest in our young people. Heckman and Cunha identified low-achieving white girls from the 1979 study who later became mothers of boys. Then they examined in detail the "investments" in cognitive and non-cognitive skills that the mothers' children had received, particularly family investments.

This paper develops econometric models of skill formation that distill the essence of recent empirical findings from the literature on child development. The goal is to provide a theoretical framework for interpreting the evidence from a large empirical literature, for guiding the next generation of empirical studies, and for formulating factually based policy.

Bibliography Citation
Heckman, James J. and Flavio Cunha. "Investing in Our Young People." Working Paper, University of Chicago, November 2006.