useful conceptual tools for organizing the evidence on child development.
5.6 The Role of Ability in Returns to Schooling and in Choice of Post-School Investment
Ability is not only a primary determinant of schooling decisions and hence earnings, but it also affects the return per unit of schooling as well as participation in job training. Table 2 gives our evidence on the effect
42We discuss the evidence on other visitation programs in section 6.1.4.
43The Infant Health and Development Program was a randomized study of low-birthweight infants conducted at 8 sites around the country. The treatment group received home visits by program staff, child attendance at a child development center, and parent group meetings. Both treatment and control children received medical, developmental, and social as- sessments, with referral for pediatric care and other services. All services were provided at no cost to the families. The intervention lasted until children were 36 months of age, adjusted for prematurity.
44However, any cognitive effect of IHDP are almost entirely attenuated by age 8 (see McCartonet al.,1997).
of ability on participation in post-school job training programs. For different demographic groups it shows the effect of measured ability (AFQT) on participation in company training programs. More able people are substantially more likely to participate in company training. Far from remediating credit constraints, as they are sometimes conjectured to do, private-sector post-school investment programs reveal that those who start with higher initial conditions make more investments throughout their lifetimes.
We have already discussed the evidence that the wage returns to schooling are higher for children from the most advantaged environments. This evidence is consistent with complementarity and self-productivity.
Ability also affects the economic return to schooling. Carneiro and Heckman (2003) study the economic returns to college for people of different ability (see Table 3). Those at the bottom 5% of the ability distribution get half of the return to college of those at the top 5% of the ability distribution. Ability also affects wages independently of its effect on schooling, as shown in Carneiro, Heckman and Masterov (2005). This is further evidence on complementarity and self-productivity.
A strong connection between ability and job performance has been established in a series of studies conducted for the military. The armed services rely heavily on aptitude testing to screen recruits. Aptitude is deÞned in terms of performance on the Armed Forces QualiÞcation Test (AFQT), which is a subset of the Armed Forces Vocational Aptitude Battery (ASVAB). Category I corresponds the highest ability level, while V is the lowest, representing scores below the 10th percentile.45 Armor and Roll (1994) establish that the test is predictive of true productivity and that initial deÞcits in productivity are not remedied by work experience. Figure 11A shows the relationship between the percentage passing at a minimum qualifying score on two job-performance tests and AFQT for the two largest combat specialties. The two tests are the Skill QualiÞcation Test (SQT) for infantrymen and the Project 100,000 Test for armor crewmen.46 The
45Recruits whose scores fall in category V are ineligible for enlistment. Category I corresponds to AFQT scores in the 93-99th percentiles, II to 65-92th, IIIA to 50-64th, IIIB to 31-49th, IV to 10-30, and V to 1-9th.
46The Project 100,000 measure was aÞeld test using real equipment of some task in which performance of each subtask was scored by an officer as correct or incorrect. The passing rate is set at 50% correct. The SQT includes a hands-on performance test, a job knowledge test, and a certiÞcation component (e.g., Þring range qualiÞcations). A score of 60%
correct is considered a minimum level of job proÞciency. This accounts for the gap between the two lines in theÞgure.
strong positive relationship between the tests is unambiguous. Moreover, job experience does not appear to mediate these performance gaps substantially. Remediation through experience, which is sometimes claimed to be effective (Bruer, 1999), is actually ineffective in closing skill gaps. Early disadvantages are not easily remedied by compensatory investments or work experience at later ages.
Figure 11B shows the link between time on the job and the average score on the hands-on performance test developed by the Job Performance Measurement/Enlistment Standards Project (JPM) for Þrst-term soldiers from all four branches of the military. While the performance of soldiers at all ability levels improves with experience, the difference between categories I-II and IV remains constant at approximately one-half of a standard deviation. To put it differently, the average category IV soldier with three years of experience performs at the level of a category IIIA soldier with one year of service.
Ability formed in the early years is also important in explaining crime, teenage pregnancy and a variety of social pathologies. Figure 12A shows that women with low cognitive ability are more likely to bear children when they are young. Figure 12B shows that men of low cognitive ability are more likely to spend time in jail by the time they are 30. Figures 12C-D show that maternal ability is positively associated with how much cognitive and emotional stimulation children receive. It appears that children for whom early investment is crucial are the least likely to receive it. Maternal ability is a crucial ingredient in eliminating test score gaps of children as demonstrated in section 2. Not only do less able women bear children at earlier ages, but they propagate themselves across generations by investing less in their children.
We next turn to an analysis of the evidence on the effectiveness of speciÞc policies in supplementing the environments of disadvantaged children.