An early start in life is a good start

A’la James Heckman, the importance of early life for economic outcomes seems only to grow:

Is lifetime inequality mainly due to differences across people
established early in life or to differences in luck experienced over
the working lifetime?  We answer this question within a model that
features idiosyncratic shocks to human capital, estimated directly from
data, as well as heterogeneity in ability to learn, initial human
capital, and initial wealth — features which are chosen to match
observed properties of earnings dynamics by cohorts.  We find that as of
age 20, differences in initial conditions account for more of the
variation in lifetime utility, lifetime earnings and lifetime wealth
than do differences in shocks received over the lifetime.
  Among initial
conditions, variation in initial human capital is substantially more
important than variation in learning ability or initial wealth for
determining how an agent fares in life.  An increase in an agent’s human
capital affects expected lifetime utility by raising an agent’s
expected earnings profile, whereas an increase in learning ability
affects expected utility by producing a steeper expected earnings

The emphasis is mine; here is the whole paper.  Here is a non-gated version.  In other words, treat your kids well, invest in them, and realize that determinism is not altogether crazy.  Here is a related paper about how mental health problems in childhood plague later life and earnings.


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