daniel trefler, rotman school of management may 23, 2015 1 looking backward: how childhood...

Daniel Trefler, Rotman School of Management April 18, 20231

Looking Backward: How Childhood Experiences Impact a Nation’s Wealth

Daniel Trefler

Rotman School of Management

Rotman Life-Long Learning Lectures 2003April 18, 2023


Introductory Notes

Children’s issues play a surprising role in Canadian productivity, particularly in the set of policies we need to make Toronto the wealthiest city in North America and Canada the richest jurisdiction in the world.

Having studied the range of policies needed to meet these goals, I now understand that there is no single policy, no magic bullet that will propel us forward. Instead, there is a set of complementary policies, policies that reinforce one another, that must be put into place. Several of these policies involve investing in people and that is how I come to early childhood research.


Introductory Notes

By the time I have finished I hope to have persuaded you of three facts:1. Our understanding of why early childhood interventions are

successful is based on hard-nosed science. In the last decade, research on animal models and fundamental human biological processes have revolutionized our understanding of ourselves and placed early development issues at the forefront.

2. Cost effective investments in people are ones targeted early on in the life course.

3. Early childhood interventions are a touchstone for many important productivity-enhancing policies that this country must implement if it is to become the world’s best place to live.


Introductory Notes

Overview of talk:

1. Human capital formation, especially a university education, is fundamental in the new economy. I will use this as an extended example of how early childhood experiences force us to rethink post-secondary education policy.

2. I will review just three hard scientific findings that shed light on the role of early childhood education. These are early brain plasticity, the stress system, and serotonin metabolism.

3. I will return to the broader question of how childhood interventions complement a host of productivity-enhancing policies that Canada must consider if it is to become the most desirable location in the world in which to live.


Part 1. Post-Secondary Education Policy

Why do poor teens fail to enroll in post-secondary

institutions?


Human Capital is strongly associated with growth

Slope = 0.69

R2 = 0.704

5

6

7

8

9

10

11

-2 -1 0 1 2 3 4 5

(Log of % of Population Educated, 1990)

(Lo

g o

f Per

Cap

ita G

DP

, 199

0)

Wea

lth

Post-Secondary Education

Source: Author’s calculations based on PWT and Barro-Lee


0%

10%

20%

30%

40%

50%

60%

70%

80%

Poor Family (Bottom IncomeQuartile)

Rich Family Top Income Quartile)

Canadian Post-Secondary Participation Rates by Income: Evidence of Credit Constraints or Lack of Demand?

Why the difference: poor early childhood experiences limit demand? Tamara Knighton and Sheba Mirza, “Postsecondary Participation: The Effects of Parent’s Education and Household Income” Education Quarterly Review, 2002, Vol. 8(3). ‘Poor’ (‘Rich’) means in the bottom (top) quartile of the after-tax household income distribution.

Teens FromPoor Families

Teens FromRich Families

25%


U.S. Post-Secondary Enrollment for Bright Teens:After adjusting for early experiences, income does not matter

Poor

PoorRich Rich

0%

20%

40%

60%

80%

100%

No Adjustments Adjusted for Parents'education, broken

home

21% 4%

• Bright Teen: Top third of 12 year old students who took the High Armed Forces Qualifying Test (AFQT). • Source: Heckman and Carneiro, “Human Capital Policy” NBER working paper.


Additional Notes

I can do a similar analysis for: High school graduation Grade 10 math streaming Readiness to learn in JK Cognitive and non-cognitive test scores at the

earliest ages.


7%

36%

71%

35%

13%

54%

-5% 15% 35% 55% 75%

5 or more arrests by age 27

Homeowner at 27

High school graduate (or GDE)

Program Participants Control Group

High/Scope Perry Preschool Project - major findings at age 27Early Childhood Interventions: Perry Preschool Program

Sample consists of disadvantaged, low-IQ children, ages 3-4, from Ypsilanti, Michigan. Children were provided with an enriched environment during ages 3-4 and then followed, along with a control group, for 35 years. Source: Schweinhart et al. (1993)

+17%

+23%

-28%


Control Control

Program Program

0%

20%

40%

60%

80%

100%

Social Competence CognitiveDevelopment

“Readiness to Learn” Program in Toronto

28% 23%

Source: McCain and Mustard, Three Years After

SocialCompetence

CognitiveDevelopment


ROI for Human Capital Investments During the Life Course

Rat

e o

f R

etu

rn o

n I

nve

stm

ent

Early Childhood

K-12

Post-Secondary

Work-Force

Age

Human capital accumulation is a dynamic process. The skills acquired in one stage of the life cycle affect learning at the next stage.

Remediation of early childhood opportunities is very expensive.


Part 2. Basic Science

What explains whyeducational interventionsare more cost effectiveearly in the life course?

1. Brain ‘Plasticity’2. The ‘Stress System’

3. Serotonin Metabolism


Brain Plasticity (2)


The Stress System: Coping With Challenges (1)


Mean Swimming Distance to the Platform

0

2

4

6

8

10

12

14

16

6 12 24

Source: Sapolsky, 1992, figure 12.8

Age (In Months)

Dis

tan

ce (

In M

etre

s) Non-Handled Rats

Handled Rats


Evidence on IQ – Romanian Orphans

0

20

40

60

80

100

120

DevelopmentalQuotient

Communication Socialization Motor Skills

Non-Instit (<6 months) Institut. Adopt. (>6 months)

VINELAND MEASURESVINELAND MEASURES

Note that institutional adoptions <6 months do much better than >6 months


Evidence on Aggression – Knock-Out Rhesus Macaques

Control group: Offspring raised by biological mother display the usual aggressive behaviour.

Treatment group: Offspring adopted by highly nurturing mothers displayed healthy exploration of their environment, coped better with stress, and were less upset about weaning. There were also marked improvements in serotonin metabolism.


Part 3. Policy Complementarities

Early childhood interventionscomplement other

productivity-enhancingpolicies that

Canada must adopt.


InnovationAgenda

• Universities

Productivity

• Worker Quality

EarlyChildhood


Work Ethic

Teamwork

Communication

Problem Solving

0 10 20 30 40 50 60

Wor k E thi c

T eamwor k

Communication

P r oblem Solving

Human Resources: Canada’s Skill Shortage

Source: Education and Knowledge: Some Perspectives from 21st Century Manufacturing, Canadian Manufacturers and Exporters


Health

InternationalTrade

InnovationAgenda

• Universities

Productivity

• Worker Quality

Cities• Infrastructure• Clusters• Immigration• Quality of Life

EarlyChildhood


Early Childhood Research as a Touchstone

Universities and tuition

Cities: invest in people, not infrastructure. Do so through community-based interventions (e.g., schools) Added bonus: reduce crime and poverty.

Immigration stress, acculturation

Human resource development: a coworker who performs poorly in the stressful world of high-tech innovations, who shows little curiosity, reacts aggressively, and is not particularly bright?

International trade: We do not want workers whose skills compete with those of low-wage

foreigners.


How Are We Doing In Canada?


Suggested Readings

1. Pedro Carneiro and James Heckman, “Human Capital Policy” National Bureau of Economic Research Working Paper #9495, February 2003. This paper evaluates the cost effectiveness of investments in people at

various stages of the life course. Heckman is a Nobel Laureate who specializes in evaluating training programs. Available on the web at http://www.nber.org/papers/w9495.

2. Bruce McEwen, “Stress and the Brain” in States of Mind: New Discoveries about How Our Brains Make Us Who We Are edited by Roberta Conlan, pages 81-102. The entire book was written by the leading scientists in the field and

then re-written by journalists in order to make it a pleasure to read.

3. Margaret McCain and Fraser Mustard, Government of Ontario Early Years Study: Reversing the Real Brain Drain, April 1999. Available on the web at http://

www.gov.on.ca/CSS/page/services/oey/earlyYearsStudy.pdf.

daniel trefler, rotman school of management may 23, 2015 1 looking backward: how childhood...

Documents

early childhood interventions

early childhood research

set of policies

university education

early development issues

range of policies

postsecondary institutions

early brain plasticity