LIFE CYCLES

14. . . Karlan, Am. Econ. Rev. 95, 1688 (2005). 24. D. Livermore, . . Moran, . R. Rindfuss, P. . Stern, Eds., 35. D. C. Dennett, Breaking the Spell: Religion as a Natural 15. . W. Harrison, . A. List, J. Econ. Lit. 42, 1009 (2004). People and Pixels (National Academy Press, Washington, Phenomenon (Viking Press, New York, 2006). 16. D. A. Dillman, Mail and Internet Surveys: The Tailored DC, 1998). 36. Demographic and Health Surveys (www.measuredhs.com). Design Method (Wiley, New York, 2000). 25. W. D. Nordhaus, Proc. Natl. Acad. Sci. U.S.A. 103, 3510 37. Luxembourg Income Study (www.lisproject.org). 17. Beyond this statistical challenge, the Web is changing (2006). 38. World Values Survey (www.worldvaluessurvey.org). how social science, along with all of science, is 26. J. E. Cohen, C. Small, Proc. Natl. Acad. Sci. U.S.A. 95, 39. . W. Deutsch, J. Platt, D. Senghaas, Science 171, 450 conducted. For example, massive records of the Web 14009 (1998). (1971). transactions themselves are data for analysis that uses 27. . C. ’Neill, F. . MacKellar, W. Lutz, Population and 40. P. . Smith, B. B. Torrey, Science 271, 611 (1996). complexity theory and network theory to understand Climate Change (Cambridge Univ. Press, Cambridge, 41. P. Milgrom, Putting Auction Theory to Work (Cambridge social and economic networks (42, 43). 2001), pp. 114–117. Univ. Press, Cambridge, 2004). 18. J. Witte in Society Online: The Internet in Context, 28. L. Jin et al., Proc. Natl. Acad. Sci. U.S.A. 96, 3796 (1999). 42. M. E. J. Newman, A. L. Barabasdi, D. J. Watts, Eds., The P. . Howard, S. Jones, Eds. (Russell Sage Foundation, 29. . L. Bonham, E. Warshauer-Baker, F. S. Collins, Am. Psychol. Structure and Dynamics of Complex Networks (Princeton New York, 2004), p. xv. 60, 9 (2005). Univ. Press, Princeton, NJ, 2003). 19. M. Schonlau, A. Van Soest, A. Kapteyn, M. Couper, 30. S. M. McClure, D. I. Laibson, G. Loewenstein, J. D. Cohen, 43. D. J. Watts, Six Degrees: The Science of a Connected Age J. Winter, in preparation. Science 306, 503 (2004). (Norton, New York, 2003). 20. W. S. Bainbridge in Computing in the Social Sciences, 31. G. S. Berns et al., Science 312, 754 (2006). 44. W.P.B. is a member of the Board of Reviewing Editors of O. V. Burton, Ed. (University of Illinois Press, Urbana, IL, 32. J. . Kagel, R. C. Battalio, L. Green, Economic Choice Science and former Director of the Division of Social, 2002), pp. 51–56. Theory: An Experimental Analysis of Animal Behavior Economic, and Behavioral Research at the NSF. B.B.. is a 21. U.S. Census Bureau Center for Economic Studies (Cambridge Univ. Press, Cambridge, 1995). Fellow of the AAAS and former Executive Director of the (www.ces.census.gov). 33. Chicago Core on Biomarkers in Population-Based Commission on Behavioral and Social Sciences and 22. Procedures and Costs for Use of the Research Data Center Aging Research (http://biomarkers.uchicago.edu/ Education at the National Research Council. (www.cdc.gov/nchs/r&d/rdc.htm). studiescollectingbiomarkers.htm) summarizes studies 23. J. M. Abowd, J. I. Lane, Tech. Pap. No. TP-2003-10 collecting biomarkers in population settings. (U.S. Census Bureau, Washington, DC, 2003). 34. J. Henrich, Science 312, 60 (2006). 10.1126/science.1130121

Early family environments are major predic- PERSPECTIVE tors of cognitive and noncognitive abilities. Research has documented the early (by ages 4 Skill Formation and the Economics of to 6) emergence and persistence of gaps in cog- nitive and noncognitive skills (3, 4). Environ- Investing in Disadvantaged Children ments that do not stimulate the young and fail to cultivate these skills at early ages place children James J. Heckman at an early disadvantage. Disadvantage arises This paper summarizes evidence on the effects of early environments on child, adolescent, and more from lack of cognitive and noncognitive adult achievement. Life cycle skill formation is a dynamic process in which early inputs strongly stimulation given to young children than simply affect the productivity of later inputs. from the lack of financial resources. This is a source of concern because family our core concepts important to devising cumulative fashion, beginning in the prenatal pe- environments have deteriorated. More U.S. chil- sound social policy toward early childhood riod and extending throughout the early child- dren are born to teenage mothers or are living in Fhave emerged from decades of independent hood years[ (2). This principle stems from two single parent homes compared with 40 years ago research in economics, neuroscience, and develop- characteristics that are intrinsic to the nature of (5). Disadvantage is associated with poor parent- mental psychology (1). First, the architecture of the learning: (i) early learning confers value on ac- ing practices and lack of positive cognitive and brain and the process of skill formation are quired skills, which leads to self-reinforcing moti- noncognitive stimulation. A child who falls be- influenced by an interaction between genetics and vation to learn more, and (ii) early mastery of a hind may never catch up. The track records for individual experience. Second, the mastery of skills range of cognitive, social, and emotional compe- criminal rehabilitation, adult literacy, and public job that are essential for economic success and the tencies makes learning at later ages more efficient training programs for disadvantaged young adults development of their underlying neural pathways and therefore easier and more likely to continue. are remarkably poor (3). Disadvantaged early en- follow hierarchical rules. Later attainments build on foundations that are laid down earlier. Third, cognitive, linguistic, social, and emotional com- petencies are interdependent; all are shaped power- fully by the experiences of the developing child; and all contribute to success in the society at large. Fourth, although adaptation continues throughout life, human abilities are formed in a predictable sequence of sensitive periods, during which the development of specific neural circuits and the be- haviors they mediate are most plastic and therefore optimally receptive to environmental influences. A landmark study concluded that Bvirtually every aspect of early human development, from the brain_s evolving circuitry to the child_sca- pacity for empathy, is affected by the environ- ments and experiences that are encountered in a

Department of Economics, University of Chicago, Chicago, IL Fig. 1. Average percentile rank on Peabody Individual Achievement Test–Math score by age and income 60637, USA. Department of Economics, University College quartile. Income quartiles are computed from average family income between the ages of 6 and 10. Dublin, Dublin 4, Ireland. E-mail: [email protected] Adapted from (3) with permission from MIT Press.

1900 30 JUNE 2006 VOL 312 SCIENCE www.sciencemag.org SPECIALSECTION vironments are powerful predictors of adult failure suitably valued, per year for each dollar invested and motivations that children bring to school play on a number of social and economic measures. in the child). The benefit-cost ratio (the ratio of a far greater role in promoting their performance Many major economic and social problems the aggregate program benefits over the life of in school than do the traditional inputs that receive can be traced to low levels of skill and ability in the the child to the input costs) is over eight to one. so much attention in public policy debates. The population. The U.S. will add many fewer college Perry intervened relatively late. The Abecedar- Coleman Report (21)aswellasrecentwork graduates to its workforce in the next 20 years than ian program, also targeted toward disadvantaged (22, 23) show that families and not schools are the it did in the past 20 years (6, 7). The high school children, started when participants were 4 months major sources of inequality in student performance. dropout rate, properly measured with inclusion of of age. Children in the treatment group received By the third grade, gaps in test scores across socio- individuals who have received general educational childcarefor6to8hoursperday,5daysperweek, economic groups are stable by age, suggesting that development (GED) degrees, is increasing at a through kindergarten entry; nutritional supple- later schooling and variations in schooling quality time when the economic return of schooling has ments, social work services, and medical care have little effect in reducing or widening the gaps increased (8). It is not solely a phenomenon of were provided to control group families. The that appear before students enter school (4, 24). unskilled immigrants. Over 20% of the U.S. program was found to permanently raise the IQ Figure 1 plots gaps in math test scores by age across workforce is functionally illiterate, compared with and the noncognitive skills of the treatment group family income levels. The majority of the gap at age about 10% in Germany and Sweden (9). Violent over the control group. However, the Abecedarian 12 appears at the age of school enrollment. Carneiro crime and property crime levels remain high, program was intensive, and it is not known and Heckman performed a cost-benefit analysis of despite large declines in recent years. It is whether it is the age of intervention or its inten- classroom size reduction on adult earnings (3). estimatedthatthenetcostofcrime Although smaller classes raise the in American society is $1.3 trillion adult earnings of students, the earn- per year, with a per capita cost of ings gains received by students do not $4818 per year (10). Recent research offset the costs of hiring additional documents the importance of deficits teachers. The student-teacher achieve- in cognitive and noncognitive skills ment ratio (STAR) randomized trial in explaining these and other social of classroom size in Tennessee shows pathologies (11). some effect of reduced classroom size on test scores and adult perform- Noncognitive Skills and Examples ance, but most of the effect occurs in of Successful Early Interventions the earliest grades (25, 26). Schools Cognitive skills are important, but and school quality at current levels noncognitive skills such as motiva- of funding contribute little to the tion, perseverance, and tenacity are emergence of test score gaps among also important for success in life. children or to the development of Much public policy, such as the No the gaps. Child Left Behind Act, focuses on cognitive test score outcomes to Second Chance Programs measure the success of interventions America is a second chance society. in spite of the evidence on the im- Our educational policy is based on a portance of noncognitive skills in Fig. 2. Rates of return to human capital investment in disadvantaged children. The fundamental optimism about the social success. Head Start was deemed declining figure plots the payout per year per dollar invested in human capital possibility of human change. The a failure in the 1960s because it did programs at different stages of the life cycle for the marginal participant at current dynamics of human skill formation not raise the intelligence quotients levels of spending. The opportunity cost of funds (r) is the payout per year if the reveal that later compensation for de- (IQs) of its participants (12). Such dollar is invested in financial assets (e.g., passbook savings) instead. An optimal ficient early family environments is judgments are common but miss the investment program from the point of view of economic efficiency equates returns very costly (4). If society waits too larger picture. Consider the Perry across all stages of the life cycle to the opportunity cost. The figure shows that, at long to compensate, it is economical- current levels of funding, we overinvest in most schooling and post-schooling Preschool Program (13), a 2-year ly inefficient to invest in the skills of programs and underinvest in preschool programs for disadvantaged persons. experimental intervention for disad- the disadvantaged. A serious trade-off Adapted from (3) with permission from MIT Press. vantaged African-American children exists between equity and efficiency initially ages 3 to 4 that involved morning pro- sity that contributed to its success in raising IQ for adolescent and young adult skill policies. grams at school and afternoon visits by the teacher (15–17). There is no such trade-off for policies targeted to the child’s home. The Perry intervention group Reynolds et al. present a comprehensive toward disadvantaged young children (28). had IQ scores no higher than the control group by review of early childhood programs directed The findings of a large literature are captured in age 10. Yet, the Perry treatment children had higher toward disadvantaged children and their impact Fig. 2. This figure plots the rate of return, which is achievement test scores than the control children (18). Similar returns are obtained for other early the dollar flow from a unit of investment at each because they were more motivated to learn. In intervention programs (19, 20), although more age for a marginal investment in a disadvantaged followups to age 40, the treated group had higher speculation is involved in these calculations be- young child at current levels of expenditure. The rates of high school graduation, higher salaries, cause the program participants are in the early economic return from early interventions is high, higher percentages of home ownership, lower stages of their life cycles and do not have long and the return from later interventions is lower. rates of receipt of welfare assistance as adults, earnings histories. Remedial programs in the adolescent and young fewer out-of-wedlock births, and fewer arrests adult years are much more costly in producing the than the controls (13). The economic benefits of Schools and Skill Gaps same level of skill attainment in adulthood. Most the Perry Program are substantial (Table 1). Rates Many societies look to the schools to reduce skills are economically inefficient. This is reflected in of return are 15 to 17% (14). (The rate of return is gaps across socioeconomic groups. Because of the Fig. 2 by the fact that a segment of the curve lies the increment in earnings and other outcomes, dynamics of human skill formation, the abilities below the opportunity cost of funds (the horizon-

www.sciencemag.org SCIENCE VOL 312 30 JUNE 2006 1901 LIFE CYCLES

tal line fixed at r). The opportunity cost is the advantages gained from effective early inter- 14. A. Rolnick, R. Grunewald, ‘‘Early childhood development: return from funds if they were invested for ventions are sustained best when they are followed Economic development with a high public return’’ (Tech. rep., Federal Reserve Bank of Minneapolis, Minneapolis, purposes unrelated to disadvantaged children. by continued high-quality learning experiences. The MN, 2003). technology of skill formation shows that the returns 15. C. T. Ramey, S. L. Ramey, Am. Psychol. 53, 109 (1998). Conclusions on school investment and postschool investment are 16. C. T. Ramey, S. L. Ramey, Prev. Med. 27, 224 (1998). Investing in disadvantaged young children is a higher for persons with higher ability, where ability 17. C. T. Ramey et al., Appl. Dev. Sci. 4, 2 (2000). rare public policy initiative that promotes fairness is formed in the early years. Stated simply, early 18. A. J. Reynolds, M. C. Wang, H. J. Walberg, Early Childhood Programs for a New Century (Child Welfare and social justice and at the same time promotes investments must be followed by later investments League of America Press, Washington, DC, 2003). productivity in the economy and in society at if maximum value is to be realized. 19. L. A. Karoly et al., Investing in Our Children: What We large. Early interventions targeted toward Know and Don’t Know About the Costs and Benefits of Early disadvantaged children have much higher returns References and Notes Childhood Interventions (RAND, Santa Monica, CA, 1998). 20. L. N. Masse, W. S. Barnett, A Benefit Cost Analysis of the 1. E. I. Knudsen, J. J. Heckman, J. Cameron, J. P. Shonkoff, than later interventions such as reduced pupil- Abecedarian Early Childhood Intervention (Rutgers Proc. Natl. Acad. Sci. U.S.A., in press. teacher ratios, public job training, convict reha- University, National Institute for Early Education 2. J. P. Shonkoff, D. Phillips, From Neurons to Neighborhoods: Research, New Brunswick, NJ, 2002). bilitation programs, tuition subsidies, or expend- The Science of Early Child Development (National 21. J. S. Coleman, Equality of Educational Opportunity (U.S. iture on police. At current levels of resources, Academies Press, Washington, DC, 2000). Deparment of Health, Education, and Welfare, Office of 3. P. Carneiro, J. J. Heckman, in Inequality in America: What society overinvests in remedial skill investments Education, Washington, DC, 1966). Role for Human Capital Policies? J. J. Heckman, A. B. at later ages and underinvests in the early years. 22. S. W. Raudenbush, ‘‘Schooling, statistics and poverty: Krueger, B. Friedman, Eds. (MIT Press, Cambridge, MA, Measuring school improvement and improving schools’’ Although investments in older disadvantaged 2003), ch. 2, pp. 77–237. Inaugural Lecture, Division of Social Sciences, University individuals realize relatively less return overall, such 4. F. Cunha, J. J. Heckman, L. J. Lochner, D. V. Masterov, of Chicago, Chicago, IL, 22 February 2006. in Handbook of the Economics of Education, investments are still clearly beneficial. Indeed, the 23. J. J. Heckman, M. I. Larenas, S. Urzua, unpublished data. E. A. Hanushek, F. Welch, Eds. (North Holland, 24. D. A. Neal, in Handbook of Economics of Education, Amsterdam, in press). Table 1. Economic benefits and costs of the Perry E. Hanushek, F. Welch, Eds. (Elsevier, Amsterdam, in 5. J. J. Heckman, D. V. Masterov, ‘‘The productivity argument for Preschool Program (27). All values are discounted at press). investing in young children,’’ (Working Paper No. 5, Committee 25. B. Krueger, D. M. Whitmore, Econ. J. 111, 1 (2001). 3% and are in 2004 dollars. Earnings, Welfare, and on Economic Development, Washington, DC, 2004). 26. B. Krueger, D. M. Whitmore, in Bridging the Achievement Crime refer to monetized value of adult outcomes 6. J. B. Delong, L. Katz, C. Goldin, in Agenda for the Nation, Gap, J. E. Chubb, T. Loveless, Eds. (Brookings Institution (higher earnings, savings in welfare, and reduced H. Aaron, J. Lindsay, P. Nivola, Eds. (Brookings Institution Press, Washington, DC, 2002). Press, Washington, DC, 2003), pp. 17–60. costs of crime). K–12 refers to the savings in reme- 27. W. S. Barnett, Benefit-Cost Analysis of Preschool Education, 7. D. T. Ellwood, in The Roaring Nineties: Can Full Employment dial schooling. College/adult refers to tuition costs. 2004, (http://nieer.org/resources/files/BarnettBenefits.ppt). Be Sustained? A. Krueger, R. Solow, Eds. (Russell Sage 28. F. Cunha, J. J. Heckman, J. Hum. Resour., in press. Foundation, New York, 2001), pp. 421–489. Perry Preschool 29. This paper was generously supported by NSF (grant nos. 8. J. J. Heckman, P. LaFontaine, J. Lab. Econ., in press. SES-0241858 and SES-0099195), National Institute of 9. International Adult Literacy Survey, 2002: User’s Guide, Child care $986 Child Health and Human Development (NIH grant no. Statistics Canada, Special Surveys Divison, National Earnings $40,537 R01HD043411), funding from the Committee for Eco- Literacy Secretariat, and Human Resources Development nomic Development, with a grant from the Pew K–12 $9184 Canada (Statistics Canada, Ottawa, Ontario, 2002). Charitable Trusts and from the Partnership for America’s College/adult $–782 10. D. A. Anderson, J. Law Econ. 42, 611 (1999). Economic Success. This research was also supported by 11. J. J. Heckman, J. Stixrud, S. Urzua, J. Lab. Econ., in press. Crime $94,065 the Children’s Initiative project at the Pritzker Family 12. Westinghouse Learning Corporation and Ohio University, Welfare $355 Foundation and a grant from the Report to the Nation of The Impact of Head Start: An Evaluation of the Effects of Abuse/neglect $0 America’s Promise. The views expressed in this paper are Head Start on Children’s Cognitive and Affective those of the author and not necessarily those of the Total benefits $144,345 Development, vols. 1 and 2 (Report to the Office of sponsoring organizations. See our Web site (http:// Total costs $16,514 Economic Opportunity, , OH, 1969). jenni.uchicago.edu/econ_neurosci) for more information. Net present value $127,831 13. L. J. Schweinhart et al., Lifetime Effects: The High/Scope Benefits-to-costs ratio 8.74 Perry Preschool Study Through Age 40 (High/Scope, Ypsilanti, MI, 2005). 10.1126/science.1128898

_ PERSPECTIVE about one-third of those countries national pop- ulations. Adolescence has also been described as Bdemographically dense[: a period in life during Studying Adolescence which a large percentage of people experience a large percentage of key life-course events (2). Linda M. Richter These include leaving or completing school, Young people in their teens constitute the largest age group in the world, in a special stage bearing a child, and becoming economically recognized across the globe as the link in the life cycle between childhood and adulthood. productive. They also include experiences, more Longitudinal studies in both developed and developing countries and better measurements of common in this age group than in others, that adolescent behavior are producing new insights. The physical and psychosocial changes that occur are capable of substantially altering life trajecto- during puberty make manifest generational and early-childhood risks to development, in the form ries: nonconsensual sex, alcohol and drug abuse, of individual differences in aspects such as growth, educational attainment, self-esteem, peer self-harm and interpersonal violence, and getting influences, and closeness to family. They also anticipate threats to adult health and well-being. into trouble with the law. Diet and activity pat- Multidisciplinary approaches, especially links between the biological and the social sciences, as well terns, friendships, educational achievement, and as studies of socioeconomic and cultural diversity and determinants of positive outcomes, are civic involvement all affect current health, needed to advance knowledge about this stage of development. Child, Youth, Family, and Social Development, Human oung people aged 10 to 19 currently making up close to 20% of the 6.5 billion world Sciences Research Council, Private Bag X07, Dalbridge constitute a demographic bulge. They population estimated in 2005 (1), 85% of whom 4014, South Africa, and University of KwaZulu-Natal, Yare the largest age group in the world, live in developing countries and account for South Africa. E-mail: [email protected]

1902 30 JUNE 2006 VOL 312 SCIENCE www.sciencemag.org