Thursday, April 16, 2009

Peer effects and poverty on school and life outcomes

There have been a number of recent studies, most notably by Nobel laureate and Chicago Professor James Heckman, which brings to focus the importance of parental care, peer effects, and societal environment on children during their formative years. Many of these studies have been spurred on by a raging debate in the US about the reasons for the falling education standards and skill levels in the country. The initial findings from these studies have importance for all societies.

Stressing the importance of strong family ties and how ability gaps open up early in life, Prof Heckman writes (full paper here), "Dysfunctional families retard the formation of the abilities needed for successful performance in modern society". The foundation for this claim is the substantial body of evidence that highlights the importance of non-cognitive skills (as opposed to cognitive test scores) like motivation, sociability, the ability to work with others, the ability to focus on tasks, self-regulation, self-esteem, time preference, health, and mental health. Prof Heckman compares such skills to the old-fashioned "character", and attributes their development to the early environment in which the chiold is brought up.

A substantial body of research shows that earnings, employment, labour force experience, college attendance, teenage pregnancy, participation in risky activities, compliance with health protocols, and participation in crime are all strongly affected by non-cognitive as well as cognitive abilities.

Dismissing genetic determinism of the "Bell Curve" school, he writes, "Gaps in ability emerge early and persist. Most of the gaps in ability at age 18, which substantially explain gaps in adult outcomes, are present at age five. Schooling plays a minor role in creating or perpetuating gaps, even though American children go to very different schools depending on their family backgrounds. Test scores for children with very different family backgrounds are remarkably parallel with age... A substantial literature shows that family environments play an independent role in creating adult abilities. Adverse family environments of children create problem adults."

Fifty percent of the variance in inequality in lifetime earnings is determined by age 18. The family plays a powerful role in shaping adult outcomes that is not fully recognised by current American policies. As programs are currently configured, interventions early in the lives of disadvantaged children have substantially higher economic returns than later interventions such as reduced pupil-teacher ratios, public job training programs, convict rehabilitation programs, adult literacy programs, tuition subsidies, or expenditure on police. This is because "life-cycle skill formation is dynamic in nature. Skill begets skill; motivation begets motivation. Motivation cross-fosters skill, and skill cross-fosters motivation. If a child is not motivated to learn and engage early on in life, the more likely it is that when the child becomes an adult, he or she will fail in social and economic life. The longer society waits to intervene in the life cycle of a disadvantaged child, the more costly it is to remediate disadvantage."

Scott Carrell and Mark Hoekstra claim, in an NBER working paper, "that children from troubled families significantly decrease their peers' reading and math test scores and significantly increase misbehavior of others in the classroom. The effects are heterogeneous across income, race, and gender and appear to work primarily through troubled boys".

The Economist draws attention to the work of Martha Farah of the University of Pennsylvania who showed that the working memories (the ability to hold bits of information in the brain for current use - entry into working memory is a prerequisite for something to be learnt permanently) of children who have been raised in poverty have smaller capacities than those of middle-class children. Gary Evans and Michelle Schamberg (full paper here or here) have in a recent paper, based on a long term study, claimed that the reduced capacity of the memories of the poor is almost certainly the result of stress affecting the way that childish brains develop.

They find that stress changes the activity of neurotransmitters, the chemicals that carry signals from one nerve cell to another in the brain; suppresses the generation of new nerve cells in the brain, and causes the "remodelling" of existing ones; and shrinks the volume of the prefrontal cortex and the hippocampus. Therefore, as The Economist writes, children with stressed lives find it harder to learn, do less well at school, end up poor as adults and often visit the same circumstances on their own children.

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