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The Economics of Human Development

Nobel Laureate James Heckman reflects on career researching human potential


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James Heckman (center) meets with graduate students, postdoctoral students, and IPR anthropologist Christopher Kuzawa (left of Heckman).

On April 27, more than 180 faculty, students, and members of the public gathered to hear James Heckman, a Nobel laureate and University of Chicago economist, speak about his game-changing work on human potential as the IPR Spring 2015 Distinguished Public Policy Lecturer. Throughout his career, Heckman has examined the efficacy of interventions to boost human development across the life cycle.

“James Heckman has dramatically changed the public discourse, the policy debates, and the government decisions, all for the better,” said IPR developmental psychologist Lindsay Chase-Lansdale, who worked with Heckman at the University of Chicago, in her introduction.

Heckman’s research “paints a very strong picture for large-scale early investments in children from disadvantaged backgrounds,” said IPR Director and education economist David Figlio. “When I think about social scientists who most embody the spirit of a place like IPR, [Heckman is] at the top of my list.” 

Civil Rights

Heckman traces some of his earliest interest in human development outcomes to his years as an early teen growing up in Jim Crow-era Lexington, Kentucky, and later traveling through segregated Mississippi and Louisiana in college. He was astounded at how quickly the South integrated after the passing of the Civil Rights Act of 1964, which outlawed discrimination in voting and employment.

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James Heckman and IPR Director David Figlio take attendees' questions.

The passing of the Act brought about a “huge empirical question,” Heckman said: Did it actually boost black employment in the South?

“To be honest, I went into that study thinking it probably wasn’t the Civil Rights Act. There were a lot of competing explanations,” Heckman said—including the booming Vietnam War economy. But “in the end, we surrendered. We could see ’64 was a real bellwether.”

Heckman cites this research as some of his best work, because it combined “all kinds of evidence,” from anecdotes to data collected by Southern states to measure Jim Crow compliance. “I personally think that’s the way to do empirical work,” he said.

Education in Early Childhood

From the Civil Rights Act, Heckman turned to investigating early-life human development interventions, as well as the effects they might have later on.

Heckman said he was alerted to the benefits of early childhood education programs when evaluating the long-term effects of the Perry Preschool and Abecedarian programs of the 1960s and 1970s. While the programs’ effects on IQ faded over time, they boosted participants’ socioemotional skills—such as initiative and persistence—as well as improved their physical health. Later in life, participants went on to earn more money and spent less time in prison when compared with their peers who were not in the program. 

“Skill investments today percolate over the whole life cycle. Because they create a base, they make it possible for individuals to gain substantial returns over the whole life cycle,” Heckman said. 

Teachers and parents should work to foster social and emotional skills in schools throughout all stages of education, Heckman argued. He noted, however, that the current emphasis on test scores and “stuffing kids with facts” in American schools removes the focus from these skills.

“This is a case where, in some sense, we’ve educated ourselves to be ignorant,” he said. “This narrow view of education, and the way we evaluate education, is harmful.”

Research on GED Programs

Heckman cited his research on GED (General Educational Development) programs as an example of the deleterious effects stemming from an overreliance on test scores. This research is also the topic of his latest book, The Myth of Achievement Tests: The GED and the Role of Character in American Life. 

When he examined life outcomes of GED holders, he found that high school graduates outperformed them in almost every way, even though the GED test ostensibly granted high school equivalency.

This phenomenon, Heckman realized, tied back to Perry. GED holders lacked the same character skills that Perry had fostered in preschoolers, skills that would help them stay the course in their lives.

Additionally, the ways educators administered the test encouraged dropping out. In high schools, the test became “an option given to the weaker students to get out,” Heckman said. In prisons, the GED became a way to get parole.

Only women who became pregnant, dropped out of high school, and took the GED to return to the workforce appeared to benefit from the test—likely because they possessed the character skills other GED recipients did not, Heckman said.

Looking Forward

Not content to rest on his laurels, Heckman continues to research human development, most recently working with primatologists to analyze behavior, gene expression, and personality traits.

“There are all these things I would like to know—that I’ve been trying to know for decades. I’m not completely optimistic I’m ever going to know. But I’m going to struggle anyway, and I think that’s the idea,” he said. “You go at this with humility, and you also realize you can learn along the way.”

Heckman, who referenced research by IPR anthropologist Christopher Kuzawa, IPR labor and education economist Kirabo Jackson, IPR economist Jonathan Guryan, and others during his lecture, also voiced his appreciation for IPR.

“I really respect the work of the people here. It’s at a very high level, and extraordinarily useful,” he said.

James Heckman is Henry Schultz Distinguished Service Professor of Economics and the founding director of the Center for Economics of Human Development at the University of Chicago, and the recipient of the 2000 Nobel Memorial Prize in Economic Sciences. David Figlio is IPR Director and Orrington Lunt Professor of Education and Social Policy and of Economics. Lindsay Chase-Lansdale is Associate Provost for Faculty, Frances Willard Professor of Human Development and Social Policy, and an IPR fellow. 

IPR Distinguished Public Policy Lecturers are prominent individuals who straddle the worlds of policymaking and academia and can speak on the use of research in policymaking. A list of past lecturers can be found here.