The economics, technology, and neuroscience of human capability formation

Abstract

This article begins the synthesis of two currently unrelated literatures: the human capital approach to health economics and the economics of cognitive and noncognitive skill formation. A lifecycle investment framework is the foundation for understanding the origins of human inequality and for devising policies to reduce it.

Fig. 1.

Children of the National Longitudinal Survey of Youth average standardized score for Peabody Individual Achievement Test-Math by family permanent income quartile. [Reproduced with permission from ref. (Copyright 2006, North-Holland).]

Fig. 2.

Health and income for children and adults, U.S. national health interview survey 1986–1995. Reprinted with permission from ref. .

Fig. 3.

Probability of daily smoking by age 18, males by decile of cognitive and noncognitive factor. The highest decile of cognitive and noncognitive ability is “10.” The lowest decile is “1.” [Reproduced with permission from ref. (Copyright 2006, Univ of Chicago Press).]

Fig. 4.

Ratio of early to late investment in human capital as a function of the skill multiplier for different values of complementarity. [Reproduced with permission from ref. (Copyright 2006, North–Holland).]