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Symposium 2013

Solution for Inequality and Human Capital

The Challenge

Both advanced industrial economies such as the United States and rapidly growing economies such as China are exhibiting increasing levels of inequality and disadvantage. Recent research on the sources ...

Both advanced industrial economies such as the United States and rapidly growing economies such as China are exhibiting increasing levels of inequality and disadvantage. Recent research on the sources of inequality has begun the process of creating a new social science paradigm which integrates economics, psychological sociological and biological factors in order to provide a comprehensive understanding of the determinants of socioeconomic status across the life course as well as intergenerational mobility. This new work embodies a rich conception of the forces that underlie individual decision making that draws upon the insights of many disciplines. These insights are unified by conceptualizing inequality in socio-economic outcomes as derivative from inequalities that emerge in cognitive and noncognitive skills, which include personality traits as well as human capital and intelligence.

Recognize that the best educational investments are in pre-school and early years education

Alongside the growing gap in incomes, there is a growing gap in the investments in time and money that parents make in their children. Children with parents with low education and low income receive significantly less parental teaching and fewer educational development activities. Research shows that this gap leads to significantly wider gaps in educational outcomes and job prospects.

The best way to address this problem is to provide or subsidize early childhood education. This early investment in human capital has been shown to have a much higher return than interventions later in life, such as job promotion or employment policies.

Nutrition, developmentally appropriate educational services, and parental training have lasting effects on children’s basic skills, which must be mastered early in life.

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