Estimating the production function for human capital: results from a randomized controlled trial in Colombia Estimating the Production Function for Human Capital: Results from a Randomized Controlled Trial in Colombia

We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children aged 12 to 24 months at baseline. We estimate the determinants of parents’ material and time investments in these children and evaluate the impact of the treatment on such investments. We then estimate the production functions for cognitive and socio-emotional skills. The effects of the program can be explained by increases in parental investments, emphasizing the importance of parenting interventions at an early age. (JEL H31, I24, I25, I28, I3, J38, O1, O15, O54) ⇤Attanasio: Department of Economics, University College London, Drayton House, 30 Gordon Street, London WC1H 0AX, Institute for Fiscal Studies, FAIR and National Bureau of Economic Research (email: o.attanasio@ucl.ac.uk); Cattan: Institute for Fiscal Studies, 7 Ridgmount Street, London WC1E 7AE, and IZA Institute of Labor economics (email: sarah c@ifs.org.uk); Fitzsimons: UCL Institute of Education, 20 Bedford Way, London WC1H 0AL, and Institute for Fiscal Studies (e.fitzsimons@ucl.ac.uk); Meghir: Department of Economics, Yale University, 28 Hillhouse Avenue, New Haven, CT 06511, National Bureau of Economic Research, IZA Institute of Labor economics and Institute for Fiscal Studies (email: c.meghir@yale.edu); Rubio-Codina: Inter-American Development Bank,1300 New York Avenue, N.W. Washington, D.C. 20577 (email: martarubio@iadb.org). We thank four anonymous referees and the editor for detailed comments. We have benefited from extensive discussions with Don Andrews, Joseph Altonji and James Heckman. We are grateful to Sally Grantham McGregor who participated in designing and implementing the experiment we describe here. We also thank participants at the NBER Summer Institute, Barcelona GSE Summer Forum and Montreal CIREQ Applied Microeconomics on Fertility and Child Development and seminars at Stanford University, University of Chicago, Oxford University, Cornell University, Bristol University and the Institute for Fiscal Studies for their comments. The authors gratefully acknowledge the support of the British Academy (grant reference pf140104), the NIH (grant reference R01 HD072120), the Economic and Social Research Council’s Centre for the Microeconomic Analysis of Public Policy at the IFS (grant reference ES/M010147/1), the Cowles Foundation and the ISPS at Yale. Attanasio’s time was partly funded by an European Research Council (ERC) Advanced Grant (Grant Agreement No 695300). This project has also received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (Grant Agreement No 646917, 240910, and 249612). The authors thank the Economic and Social Research Council (grant RES-062-23-1548), Inter-American Development Bank, World Bank, and International Growth Center for funding the intervention and data collection. The authors declare that they have no relevant or material financial interests that relate to the research described in this paper. All errors are the responsibility of the authors. The first five years of life lay the basis for lifelong outcomes (Almond and Currie, 2011). Due to rapid brain development and its malleability during the early years (Knudsen, 2004; Knudsen et al., 2006), investments during this period play a crucial role in the process of human capital accumulation. At this time however, many children are exposed to risk factors such as poverty, malnutrition and non-stimulating home environments preventing them from reaching their full potential, particularly in developing countries (Black et al., 2016; Grantham-McGregor et al., 2007; Lu et al., 2016). Thus children from poor backgrounds accumulate developmental deficits from a very early age (Lancet, 2016; Rubio-Codina et al., 2015). These factors are likely to play an important role in the intergenerational transmission of poverty. There is increasing evidence that early childhood interventions can help overcome these detrimental factors and have positive effects on children’s development in both the shortand long-term. Examples include the Jamaica study (Grantham-McGregor et al. (1991), Walker et al. (2011) and Gertler et al. (2014)), the Perry Preschool program (Heckman et al., 2010) and the Abecedarian experiment (Campbell and Ramey (1994), Campbell et al. (2014)). In Attanasio et al. (2014), we present the impacts of an 18-month long early childhood intervention in Colombia targeted at disadvantaged children aged 12-24 months old at baseline and evaluated by a randomized controlled trial. The intervention was based on the Jamaican model of psychosocial stimulation via weekly home visits based on the curriculum now known as “Reach-up and Learn”, and also offered micronutrient supplementation. However, unlike the Jamaican program, it was designed to be scalable by training local women involved in the implementation of a large welfare program to administer the weekly home visits. Attanasio et al. (2014) shows that stimulation led to highly significant improvements in cognition and language development measured immediately following the end of the intervention1, and that micronutrient supplementation did not affect any outcome observed in the data. The paper also reported impacts on two raw measures of the home learning environment (measured by the Fam1Using the Bayley (2006) scale of infant development, cognition improved by 26% of a Standard Deviation (SD) (p-value 0.002) and receptive language by 22% of a SD (p-value 0.032). These reported p-values are adjusted for testing 12 hypotheses.